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

Author: Mark Fletcher

Bill Express, who knew what and when

While the future of Bill Express remains unknown – the company extended its trading halt another five days today (groan) – the hunt for evidence and for people of interest by those behind several possible court and other actions continues.

Prior to joining the Board of the Australian Newsagents’ Federation in December 2003, I was provided Board minutes and papers for the previous year. This covers the period during which the Bill Express decision was taken. I have a dilemma around what I should or should not do with the information to which I am privy. In navigating my dilemma I need to consider my obligations to the “Company” as well as my obligations to its shareholders, newsagents. These considerations are complex for many reasons. I am certain that I am not the only former Director or officer of the Association with the same dilemma.

At least three legal briefs are being prepared around the issue of whether newsagents were deceived or misled into signing agreements for the Bill Express service and if so by whom. At least two Government agencies are asking questions of newsagents and others who may have evidence on which a case could be built. Three reporters are asking questions, two about the company and one about what due diligence was done (or not done) prior to the offer being put to newsagents in 2003. As I said, this is complex.

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Bill Express

Kleins and newsagents

Newsagents should read the report in The Age today about the closure of the Kleins jewellery group corporate stores and the re-branding of franchise stores. Philip Hopkins’ interview with Administrator James Stewart of Ferrier Hodgson is telling:

Mr Stewart said Kleins had failed to stay relevant to its market and customers. Its stock was not fresh.

My question is how relevant are newsagencies? Not how relevant do we think we are but how relevant are we? Consumer research data by at least one major supplier to newsagents suggests that our relevance in the minds of consumers is fading with time.

“In the past few years, new competitors such as Diva and Groove have appeared,” he said. The changing dynamics were reflected in the companies’ respective websites.

“Diva’s website offered a more sexy vision than Kleins’.”

Most newsagents don’t have any web presence. The YourNewsagent website is an excellent initiative for newsagents to at least get a basic web presence up and running. The Find It free online classifieds business for newsagents project I launched a couple of years ago failed to attract interest from more than 30 active newsagents. Newsagents need to understand the need to be online before it is too late. Once there, they need to be relevant and to evolve – in a way that Kleins did not.

Stewart’s comment about stock in most interesting for newsagents to consider. How fresh is our stock, especially our stationery? I know from data I see that many newsagencies have stock which is years old. In today’s market, stock which is six months old is too old.

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Newsagency challenges

Photocopying a fading service

pcopier.JPGFrom data I am fortunate to see from a range of newsagencies, photocopying revenue is falling in our channel.  It was down year-on-year in two thirds of newsagencies participating in the recent sales benchmark I undertook.  The average fall was 20% with the lowest 5% and highest 48%.  I put the fall down to the lower cost of computer printers, the lower ownership cost of copying machines and more players offering discounted copying.

For newsagents, the copying service is all about convenience and the personal service many of us provide.  These are reasons why we can charge more than Officeworks and others.  In my newsagencies we have established a common price list at the higher end of the usual newsagency offer.  While it may seem counter intuitive to charge more for a service people are getting elsewhere based on price, we need to consider the cost of having the service and the reason people come to us.

In addition to the pricing issue is the efficiency of the product.  Around 75% of copying in newsagencies for which I have data the service is provided with nothing else in the sale.  This is what I mean by it being inefficient.  You’d think that a service which usually involves conversation would result in up-sell.  No, it does not in the majority of newsagencies.

We will watch the return achieved and if we don’t make what we need per square metre we will re-think cutting the service altogether.

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retail

Staples wins Corporate Express

The boxing match appears to be over and Staples has won its battle to acquire Corporate Express.  I expect this to lead to the most significant shake up in the stationery offer Australia has seen since Officeworks first opened.  Now is the time for newsagents to work on their stationery story, it will be too late in a year when we may be staring at Staples opening here.

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retail

The real Treasures of the Earth

treasuires_real.JPGYesterday was the lucky day for one of our customers! Of all magazines to have an unexpected bonus it had to happen to Treasures of the Earth. Perfect!

One copy of issue #10 of Treasures of the Earth which arrived yesterday had sealed inside the package with the Galnea, a plastic shelf fixture – circled in yellow in the photo.

Now if only this piece of the warehouse shelving system was in the shape of a famous person or a religious icon. Then we could have sold it on eBay.  It did give us a laugh though.

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magazines

Cashing in on Kung Fu Panda

kung_fu_panda.JPGThe movie Kung Fu Panda is getting plenty of press here even though it does not open until June 26.  Hallmark cards has the licence so there is an excellent promotional tie-in for many newsagents.  The gift bag featuring the panda character is fantastic – when you open the flap at the front the panda just about jumps out at you.  It is around card and gift licences like Kung Fu Panda that we can drive sales outside of the traditional card and gift space.  Connecting with hot licences adds credibility to newsagencies with the target generation of the licence.

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giftwrap

Stalking in blog comments

Thomas T, Mary Perna, Mark Anonymous, Ron Johnson, and Robbie Mascon, a specific group of people who have posted comments here over the last two months, are all posting from the same IP address.  This suggests they are either living together, working at the same office or that they are all the same person.  The email addresses they have used are: thommo69@optushome.net.au, mperna2@gmail.com, mark.anonymous@hotmail.com, Privacy@preferred.com and robbiemascon@live.com.au respectively.  The IP address is 58.161.17.183.

Most of their comments are puerile and malicious.  Why they stalk this place when they clearly don’t like what the read is a mystery.  One can only speculate as to their agenda, especially given one stream of comments which was deleted for their own protection.

Anyone standing on a soapbox and sprouting their opinion has to be open to debate and criticism.  Others participating in public debate owe it to all participants to be on-topic, fair and honest.  If they don’t like the speaker or have an off-topic axe to grind, they ought to move on.

I am all for open discussion.  All I ask is honest identification of yourself and genuine contribution to the topic at hand.

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About us

Tattersalls vs Intralot and retail space

fhn_scratch_bay.JPGI was interviewed last night by Mark Hawthorne for his report in The Age today about how Tattersalls is treating its retail network over the handling of allocating space to Intralot. Jon Faine on ABC local radio in Melbourne today covered the Tattersalls / Intralot story from a different angle and interviewed a Tattersalls agent from Cheltenham.

Media coverage of the challenges facing newsagents and lottery agents is most welcome. In my own case, Tattersalls is demanding I follow a rule book which the company has conveniently ignored for the last five years. The space I have allocated to Intralot is space I have used for other products all this time. Now, it suits Tattersalls to dust off the rule book and threaten my livelihood and that of all stakeholders in my newsagency.

Silence from Tony Robinson, the Minister for Gaming in the State Government is deafening. Having created the challenges for small businesses, his government appears to care less about the business owners, their employees and the families which rely on them.

Commonsense ought to prevail. Tattersalls ought to have business rules which focus on our sales performance and not the real-estate we allocate. It suits me and them that I and my team do this.

The photo shows one of our scratch ticket bays this morning at Forest Hill. We only have two packs of scratch tickets left. Tattersalls has no new product for this and currently does not have Government approval for scratch ticket product. Why they demand we keen this space vacant for them without a revenue opportunity is beyond me.

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Lotteries

Network rewards tech savvy newsagents

Magazine distributor Network Services has joined other magazine distributors and decided to drop paper based magazine returns forms for newsagents with compliant software and business practices.  This move is most welcome.  It gets newsagents closer to genuine time savings from returns scanning.  The less newsagents hve to interact with the Network website for tasks their sofwtare can transact automatically through to Network the better.

The company has also announced a move to weekly returns from January 1, 2009 – again for compliant newsagents.

These moves reinforce the need for newsagents to have up to date magazine distributor approved software and that its use is based on compliant business practices.  The benefits for newsagents, beyond time savings, are more accurate allocation, faster credits for returns and better business data on which to make decisions.

All of this is further evidence that DOS is dead when it comes to newsagency software.

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magazine distribution

Magazine workshop for newsagents

mags_wshop.JPGI have put together a magazine workshop for newsagents which looks at retail and online trends and presents strategies newsagents can use to grow magazine sales. The goal is that by the end of the workshop each newsagent has an action plan of changes in how magazines are managed and marketed in their business. Most of the changes I discuss do not involve any capital expense and only a small investment in labour.

With magazines considered by most newsagents as a key point of difference they have over other retailers, I figured it was time for us to manage the department as if we believe this.

The workshop is free. I’m happy to present it to any group of fifteen newsagents or more. If you are interested in a magazine workshop in your area, please contact me.

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magazines

Fairfax launches online paper in Western Australia

Fairfax launched WAToday online newspaper for the WA market yesterday. WAToday joins Perth Now, an online paper launched by News Ltd last year and Perth Norg, a citizen journalism site service Western Australia.

Not so long ago a publisher wanting to enter the market would have needed printing presses and an expensive distribution infrastructure.  Today, the barriers are all but gone and new markets can be opened for little in the way of capital investment.

Newsagents ought to take note of what has just happened in Western Australia and what happened last year in Queensland.  While our channel is important to newspaper publishers, we are not part of their current expansion plans.  We have to make our own future, as it should be.

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Media disruption

Borders to discount magazines in UK

Borders is to discount magazines in its stores with a buy one get another at 50% off deal during Magazine Week in the UK.  I am not sure how I would react to that given that more than half magazine sales in most newsagencies are two or more magazines.  If it is genuine incremental sales we want we would need to do something like buy three and your fourth is free.

While Borders claims their campaign is the first discounting across all magazine titles, here in Australia, our Magazine Club Card launched in mid 2004 is the first.  It’s still running at Forest Hill where we started it as well as all newsXpress newsagencies where yeasr on year same store growth is considerably above the industry average.

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magazines

Lottery counter land grab

I have written today to Hon Tony Robinson, the Minister for Gaming in the State Government of Victoria in the hope that he can assist with a dispute over retail real-estate at our newsXpress Forest Hill location.

Tattersalls has told us that we must move the Intralot terminal on our counter or face not having access to Tattersalls product from July 1.  Tattersalls has made it clear that they will not accept any reduction in retail real-estate even though they have fewer products on offer from July 1.

The Minister, in a circular to all lottery agents, tells us to go to the Office of the Small Business Commissioner.  Based on poor handling of a complain last year I have no faith in that Office to serve the needs of my business within the time contsraints of a July 1 deadline.

Tattersalls should not penalise newsagencies like mine because they lost their monopoly in Victoria.  If they were smart they would work with us to esnure active promotion of their product across the whole of our business rather than acting like spurned lover hell bent on revenge.

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Lotteries

Bic ignores newsagents

Bic, the pen company, has ignored newsagents with their latest TV advertising. Their Brand Power ads promote supermarkets. Newsagents have been tremendous supporters of Bic. It is a pity the company did not return the favour and promote our channel when deciding where to place their marketing dollars. See the Bic advertisements at the Brand Power website.

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Newsagency challenges

Showing off the iPhone

The Associated Press’ Benjamin Mosse shows off Local News Network. Allows you to retrieve local news based on your location. Can also pull up sports, entertainment and business news. You can also check out pictures and videos from AP. You can also send in news tips and accounts of breaking news straight from your iPhone. Also free when store opens.

An entry from the SFGate live blog of Apple CEO Steve Jobs’ keynote today in San Francisco.  Hmm, local news based on your location.  Very nice!

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Media disruption

Legal threat against Bill Express

Page 23 of today’s Australian Financial Review reports about a threat of legal action against Bill Express by a group of newsagents organised through the NSW newsagents’ association. As I blogged last week, newsagent anger about Bill Express is not diminishing with time.

The legal move reportedly being taken by NANA is one of several legal fronts being pursued by groups of newsagents against Bill Express and other parties which may have played a role in getting newsagents to sign for the Bill Express service.

I understand that the ACCC is looking into the Bill Express situation as well as one or two state government authorities and another Federal authority. From what I understand, all are focused on who represented what and when to newsagents to get them to sign with Bill Express.

As newsagents trawl through their files, more are finding promotional material, articles and other documents on which they relied to sign up for Bill Express. In these documents, guarantees like the following on which I relied can be found:

Is the $210 Advertising rebate guaranteed?
Yes! The National Advertising Screen included in Package 3 includes a $210 rebate that is applied every month for the life of the agreement, as a guaranteed commitment.

This was promoted to me by Bill Express and by the Australian Newsagents’ Federation. Like many newsagents, I relied on this guarantee in making my decision.

While I am glad to see the AFR provide the Bill Express store more coverage today, I would like to see a newspaper undertake more complete reporting of the situation.

I would also like to see reporting of the current situation. Since February, the company has been unilaterally withholding around 30% of what would usually have been paid to newsagents for services rendered with the claim that the money would be used to promote the service. I have seen no evidence of any such promotion. I estimate that the company has in excess of $150,000 cash which would otherwise have been paid to newsagents but for the latest scheme the unilaterally imposed.

People wanting a summary of the Bill Express situation from a newsagent perspective ought to read by February 29 blog post.

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Bill Express

The future of e-paper

Computerworld has published an excellent article by David DeJean on e-paper. The future of e-paper is “excellent” because it is an excellent entry point for people new to e-paper, providing some good background material. Newsagents ought to read about developments around this technology in which several publishers have invested. The final paragraph summarises the economic case.

Overall, there is a feeling of potential about e-paper that’s fueled in large part by the size of the current market for publishing on paper. If e-paper grows from its current 0.1% of that market to even just 3% or 4%, said Peruvemba, “you’ll be looking at a $400 billion market.”

Eliminating distribution costs adds to the commercial appeal of e-paper for publishers. Instead of selling a new product every day, they sell recharge.

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Media disruption

Westpac hides US jitters

afr_june10.JPGThe front page to today’s Australian Financial Review newspaper has been trashed by an ad for Westpac bank stuck over a news story. The post-it note type ad is a great ‘get’ for Westpac as it pulls visual focus, like any good ad should. Everyone looking at the the AFR in a newsagency today will see the Westpac ad first.

Besides the trash caused by people ripping the ad off once the buy the newspaper, I am frustrated with the damage to the newspaper medium. Selling ads to cover news content speaks volumes about publisher commitment to news.

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newspaper masthead desecration

The importance of language

I flew to the Gold Coast today and due to poor weather the pilot aborted a landing.  In typical Virgin Blue fashion he didn’t call it an aborted landing.  He told us the weather looked rough, that we had plenty of fuel for another “run” or to head on “up the road” to Brisbane.  Announcements on other airlines would be less conversational and therefore more frustrating to the passengers. 

In our newsagencies we could learn from the Virgin Blue approach in how we talk with our customers.  We could find a more conversational style which focuses on the positive rather than negative.  This could flow through to our signs and other communications.  When you step onto a Virgin Blue plane you pass a welcome note from Richard Branson welcoming you onto Australia’s most on time airline.  When you step into a newsagency, including mine, there is no welcome, nothing unique, no personal note with a value proposition.

With the news we have to deliver  sometimes: late papers, short supply of magazines, not winning $58 million, no on a refund etc, we could find a Virgin Blue positive approach and maybe achieve a better outcome for our businesses.

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Newsagency challenges

King Island Newsagency

king_island_news.JPGI spent most of yesterday on King Island, a small island to the north of Tasmania, population 1,600 (and 6,000 cows) and home to the famous King Island Dairy. The photo is of the newsagency in Currie, the main town on King Island. Unfortunately it was closed by the time our group arrived but peering inside I could see it had the usual range of greeting cards, magazines, newspapers and stationery. It also had the tourist items you’d expect and local event notices on the door. Lottery products are sold out of the supermarket.

Walking towards the newsagency across from the street I was surprised that the only branding was the N newsagent logo. This logo was created by the NSW Newsagents Association (NANA) in the 1990s and taken over by the ANF association and rolled out nationally. The ANF launched a new logo at the convention on the Gold Coast two weeks ago – although I am not sure who will fund the roll out of the new logo.

But back to King Island, taking a look at most of the other of the retail businesses in Currie, the newsagency fits in. While they could go with bolder branding like the local IGA supermarket, the market size does not warrant this – Currie has a population of 900. It’s retail businesses are appropriately understated – business is more about the community than it is about the business. and the newsagents clearly fits in.

This newsagency is a good example of where national generic and or low cost retail branding is appropriate for a newsagency.

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Newsagency challenges

Marketing your newsagency

mf_book.JPGI was doing some tidying up yesterday and came across a copy of Marketing your Newsagency, a book I wote for D W Thorpe publishing in 1994. Thorpe published the Australian Newsagent & Stationer, the journal of record for newsagents through the 1980s and 1990s.

While not usually drawn to nostalgia, I did spend an hour leafing through the pages of Marketing your Newsagency – for the first time in at least eight years. I was surprised to read material relevant to the newsagency experience today. Of course, many retail marketing tips are timeless.

It was my comments about franchises which surprised me – I said newsagents ought to get together, re-brand behind a new name and with the disciplines of a franchise structure. While the challenges which existed in 1994 which led to me forming the view I put forward in the book remain today, groups of newsagents are responding and leaving others behind.

Some of what I wrote in Marketing your Newsagency is embarrassing to revisit as it reflected naiveté about some of the challenges newsagents faced at the time – I wrote the book two years before I purchased my first newsagency. However, it is what it is and for the most part, the marketing tips remain useful for any newsagent.

I might spend some time extracting the ideas which are genuinely useful today and repackage them in some form for the use of others. But that’s a project for another day.

I miss the folks at DW Thorpe and Australian Newsagent and Stationer.  It was good a good magazine.

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newsagency marketing

Intralot in Frankston

frank_ilot.JPGThe Intralot equipment was installed in our Frankston newsagency late last week.  The photo shows the current location – this will change when we undertake our shopfit and re-branding shortly.  Since this newsagency does not currently have Tattersalls we are not engaged in a real-estate dispute.  The space we are using was not previously being put to good use so the disruption at the counter will be minimal.  Also, from this location, we can easily sell out to the mall and to customers buying Tattersalls product from the kiosk nearby.

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Lotteries

Publisher launches online unit

The Washington Post Company has announced it will launch a new unit focused solely on online magazines. Fairfax and News here in Australia have made similar moves in the newspaper space in Brisbane and Perth respectively – creating online only products for new markets. These are smart moves as they reflect an understanding of how much distribution has changed.

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magazines

Eftpos offer for newsagents

The folks at St.George have prepared a flyer to promote the merchant offer for Tower and eziPass newsagents. This is the same offer subsequently followed by the ANF but not promoted by them.

stg.JPG

Many newsagents have already embraced these excellent rates. For the record, neither I nor any business with which I am associated is paid anything in relation to this offer. Such transparency is important given what has now transpired with Bill Express. Newsagents need certainty about the offers put to them so they can make a fully informed decision.

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Bill Payment
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