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

Author: Mark Fletcher

News Corp delays roll out of new commission structure

News Corp. released this notice yesterday:

Thursday 2 May 2019 

Dear Newsagents & Retailers 

In January this year, we informed you of our intent to consolidate our business systems and practices including the implementation of a harmonised and consistent commission structure across all ARM and News Corp Australia mastheads. 

The first stage roll out of this program was originally planned to begin in May this year. 

We would like to advise that the timing of this project has been slightly delayed. This program of work has been extended and is now planned to roll out in the new financial year. 

News Corp Australia is committed to simplifying our business to grow, and the consolidation of systems and processes across these two businesses forms an important part of this commitment. 

You should receive further detailed communications over the coming weeks outlining a range of upcoming business adjustments and improvements. 

We thank you for your continued support. 

Kind Regards 

News Corp Operations – QLD, NNSW 

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Newspapers

Against the odds: The Guardian breaks even

The Guardian has announced that they have reached break even point. This is a big story as it demonstrates that a thoughtfully developed and carefully executed plan can make a digital news platform operationally and financially viable.

As a subscriber to The Guardian and as on who appreciated their genuine independence, I am pleased to read of their success.

Today, we have announced that the Guardian has successfully completed its three-year turnaround strategy — we have hit our goal of breaking even, and made a small operating profit on our path to sustainability. This means that the money we make from advertisers combined with what we receive in the generous support from you, our readers, has this year covered the cost of producing the journalism that informs and inspires millions of people around the world. Our unique ownership model means we are not controlled by a billionaire owner, or a group of shareholders demanding financial returns — any profits made, and all financial contributions from readers, are reinvested directly into our journalism.

Further in the article by Guardian editor-in-chief Katherine Viner, there is a reflection that I think speaks to similar challenges faced by newsagents, challenges faced by the channel today.

Three years ago we faced a very different situation, when a broken business model for news was threatening to destroy media organisations around the world: print advertising was collapsing, newspaper sales were declining, and the promise of digital advertising growth was going almost entirely to Google and Facebook. These threats still exist, and while we’ve found a way to counter them, the situation remains fragile.

I see this story as offering hope and inspiration for newsagents as we transition our businesses, seeking new shopper traffic, higher margin dollar transactions and greater relevance to shoppers.

All in our channel need to work on:

  1. Attracting new shoppers.
  2. Driving up margin dollars earned per transaction.
  3. Bringing shoppers back more consistently.
  4. Managing our businesses for profit.
  5. Making our businesses appealing to everyone who walks past, walks inside, reads abut us, checks us out on social media.
  6. Changing shopper perception.

This means ranging new products, recasting the shop floor, breaking our current model. While this sounds dramatic, it is what is necessary. Historically, we have relied on consistent traffic from agency and low margin lines with the argument that high traffic makes low margin viable. That argument fails in 2019 with falling traffic from every traditional agency line product. While there are some exceptions, the channel as a whole is not experiencing such exceptions.

The future can be bright is we break our own model and recast our businesses.

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Media disruption

Pitch the new look BHG

The refreshed look for Better Homes and Gardens is a good reason to place the latest issue out today at the counter and with newspapers, as well as in the usual location. There is excellent TV coverage for the issue so support in-store should work.

Supermarkets are not likely to do anything special.

Historically, BHG responds well to in-store tactical placement support.

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magazines

You can’t miss the digital pitch from News Corp.

The News Corp websites give over plenty of screen real estate for their subscription promotions. The two pitched on he Herald Sun website are a good example. each pitched their $1 a week starter digital only promotion.

At $1 a week it’s an easy decision for plenty I suspect as it is loose change. That is how plenty of online subscriptions work, small weekly or monthly transactions you are not likely to notice and that offer incremental revenue to the supplier.

Digital gives publishers something that the physical product cannot, fractional transactions.

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Newspapers

Magazine location in-store

In US drugstores, larger format c-stores, more and more we see magazines located next to greeting cards. I have seen this in stores with a small range of cards and magazines as well as a larger range, where the two departments are next to each other.

This departmental adjacency is different to how the stores were laid out a few years ago.

I wonder if they have data that suggest commercial value from location next to each other.

While people enter these drugstores for reasons that are different to people shopping an Australian newsagency, the location of departments is something that should be regularly on our minds.

I think too many businesses incur channel have a sent and forget approach to department location in-store. Shoppers become store blind.

Changing the location of a department will usually frustrate some shoppers. It will also, usually, boost sales.

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Greeting Cards

Early engagement by police helps catch shoplifters

While this story is from the US, from the small midwest town of Burlington Wisconsin, it reflects how early engagement by police on social media can help apprehend shoplifting suspects.

Here is their first post and the photo:

Here is their next post with good news about identification:

This story also interests me because of the size of what was soles – large rolls of wire, so big they had to use a trolley to steal them.

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theft

Monthly real life titles grow market for newsagents

The monthly real life titles launched in recent times have delivered a net increase in magazine purchases. That is, they have not taken revenue from their associated titles in the magazine segment.

Looking at basket data for the That’s Life Mega Monthly, for example, I see that shopper often purchasing That’s Life in the same transaction. This is goon news that we can leverage through tactical placement.

A couple of ways to maximise the opportunity of the monthly titles are:   place the monthly next to the weekly;  and, if room permits, pitch both at the counter for a few days at least.

While magazines overall remain challenged, there are some segment level opportunities that we can leverage as engaged retailers. What we can do is different and more useful to the titles than any supermarket will do and this is something publishers could notice.

Beyond real life, categories like crosswords, current affairs (The Monthly, Quarterly Essay etc), health and gardening all benefit from tactical engagement in my experience.

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magazines

The importance of using software for managing pays

I urge all newsagents with employees to use accounting software for managing pays and producing payslips. The structure offered through this process could help you avoid issues down the track as the software creates and manages a paper trail.

There is a situation in our channel right now where a paper trail would have been helpful. No paper pay slips were issued, allowing for a Fair Work complaint that resolving is likely to be expensive for the business owner.

Payroll software or accounting software with payroll is not expensive in the overall compliance cost for business.

Getting this right matters in terms of employer obligations to employees, being able to respond to fair Work queries, for taxation purposes and to satisfy questions from franchisors as they navigate their reporting and knowledge requirements under the relatively new federal legislation that came out of the 7-Eleven pay scandal.

Click here to access the advice from the Fair Work Ombudsman website on pay slips.

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Newsagency management

Newsagents and the election

I missed this tweet from three weeks ago about News Corp., newsagents and the election.

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Social responsibility

Did you miss magazine deliveries today?

I have heard from some newsagents of magazine deliveries set for today from Ovato not being delivered. As things go with Ovato, newsagents are left without stock and the likelihood of lost stock not being replaced.

While not getting the stock is frustrating in itself, there is a cost to newsagents who rostered additional staff to handle magazines when on a Wednesday they would not usually have them rostered on. So, lost revenue and additional labour costs.

Ovato is having a bad April.

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magazine distribution

Customer feedback can help us improve the channel

On the newsXpress website, any customer of any newsXpress store can provide feedback on their shopping experience. often, feedback does not relate to a newsXpress store. Here is one such example. The person leaving the feedback contacted us the next day apologising and indicating it was for another newsagency not connected with newsXpress.

I share it here as it reflects the value of making providing feedback easy and the interest shoppers have in sharing their feedback.

My 17yr old son ventured into your newsagency enquiring as to whether the store had a key ring. Tues 16th April 1:50pm The lady (Older lady with blonde hair or partially blonde) advised my son the store didn’t have any then added “I don’t know what your fuckin talking about “. My son apologised and thanked her before leaving as he felt embarrassed. This behaviour and conduct is inappropriate and uncalled for particularly when speaking to a young person who was polite. Perhaps you need to address the conduct of your staff and the unnecesssry use of foul language. Poor customer service in any case .

Whether we like it or not, we are all judged by the experience in any store in our channel, especially businesses with lotteries as this is the most unifying product category in the channel, setting shopper expectations.

Making providing feedback easy helps us be more in touch with shopper experiences, even those not in our own stores.

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Management tip

Bumper editions have people questioning print newspapers

A couple of newsagents have emailed me about customer comment regarding Easter bumper editions.

One said they had a long-term home delivery customer saying it is time for them to switch to digital and that this surprised them and got them thinking about the future of print.

Another contacted me to share frustration of customer complaints about the in-store product without access to support forms the publisher to handball the complaints.

This copy of AFR Weekend has been on sale since April 18. Five days.

Regulars here would know, for years I have seen no upside in print newspapers. While I sell then and engage with the requisite in-store promotions, I see tho upside in terms of traffic of margin dollars contribution. Not having home delivery for more than ten years now has saved me from questions abut things like bumper editions.

The paper medium is inefficient for news and analysis. It is expensive to produce and distribute, with many distribution newsagents making a value contribution beyond what is reasonable.

The only reason many print editions exist today is to provide a time related pathway for publishing companies. There is no upside for newsagents. In the meantime, newsagents deal with questions like some have had over Easter.

Okay, I get that for many, newspapers provide terrific foot traffic. The thing is, engaged newsagents should be well advanced in alternative sources of traffic, sources with upside rather than the certain downside of print.

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Newspapers

Easter break marketing opportunity

With so many away on school holidays, this long long weekend is a good opportunity for some fun in the shop. It is an opportunity to play away from what has been traditional for the business.

I was talking about this with a newsagent a few days ago, about the opportunity to try something really crazy that they thought they could never do in their shop. I think these couple of days are the perfect opportunity to play, to experiment.

Now, more than ever, there are no rules about what we can and can’t do in our businesses, or at least the parts of the businesses retailers control.

It could be a new shop floor layout, a new in-store service, a different traffic-attracting acting or more. whatever it is, these days are ideal for play.

My point about this weekend is – if you are open and the town is quiet, do something crazy for you and your business, to find what might be next in terms of the embrace of change.

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Management tip

Free Daily Telegraph for Warringah residents?

The Guardian has a report today about The Daily Telegraph from News Corp. being delivered free to homes in Warringah.

The most mysterious event in the Sydney seat, where the former prime minister Tony Abbott is fighting a challenge from the independent Zali Steggall, is the arrival of unsolicited copies of the Telegraph, which began in late March.

Residents in Manly, Queenscliff, Curl Curl and Fairlight said they had begun intermittently receiving copies of the News Corp tabloid newspaper, despite not being subscribers. The Telegraph has run a number of stories that would not have delighted Steggall’s campaign.

News Corp. responded:

A spokeswoman for News Corp said a small number of homes had been involved in recent sampling activity in the Manly area, which had now ceased.

“Sampling activity is a standard marketing practice to introduce products to potential new customers,” she said. “All of our sampling activity is based on our market research.”

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newspaper home delivery

Ovato magazine returns file corruption returns challenge

Ovato (Gotch) has sent this email to some newsagents today:

Dear Retailer,

Due to a corrupted file a number of EDI returns were unable to be processed by us. We have identified the agents with missing returns and we are emailing you as we need you to re-send your EDI returns from 4th or 5th April through xchangeit as soon as possible so we can process your returns.

You can resend your returns from your POS or by choosing to resend the file through the Xchangeit website.

https://xchangeit.lpages.co/xit-main/#info-for-newsagents/
Log on using your account number and password
Choose the file and click on resend.

Regards
National Contact Centre
Retail Distribution

I’m told 400 newsagents have been affected. Ovato sent the email without advising software companies. Why does this matter? The software companies are the first line of contact. had they been forewarned they could have been proactive with advice rather than taking calls and scrambling to understand what has actually happened.

This is an own goal by Ovato, with companies like my own Tower Systems left to fund the cost of helping newsagents.

If Ovato did not inform XchangeIT then the failure is even greater.

Asking the files to be resent is problematic operationally. It can be done. However, getting 400 newsagents to do this is the issue, especially this week before Easter.

Given how Ovato handles returns claims disputes this could cause a significant waste of time and money for newsagents.

UPDATE 18/4/19 5:59AM:

The help desk traffic from this is immense already. While it is easy to resend the file, many have never done it and, naturally, they call for support to make sure they are not making a mistake.

What a failure by Ovato. Not the original problem and that can happen. No, the issue here is the poor communication by people at Ovato. They decided to not advise the software companies or XchangeIT before advising newsagents. That decision added workload to everyone and added unnecessary stress for newsagents.

UPDATE: 18/4/19 8:41am. Tower Systems now has the list of affected newsagents and is therefore better equipped to provide advice. That we had to chase this and did not get it until now is appalling.

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magazine distribution

Licenced product opportunities are valuable

Every year it is the same … licenced products perform well. Even movies that perform to average numbers at the bios office support products that sell well in retail. Then, there are the stand out licences, on which we can bank results, like Harry Potter.

Detective Pikachu looks good. The early indications are good due to the multi-faceted engagement with the licence – game, movie and the Switch.

We use licenced products in my stores to attract shoppers who would not usually think about us for plush and game related products. The licenced products usually lead to other purchases as we stock up what we can to play deep into a licence. This is where having supplier relationships beyond the traditional helps.

I especially like it when I can drive purchases from traditional categories, like cards, from a licence play. Unfortunately, too often, there is a lag for licences from that category.

To newsagents not playing in the licence space, I suggest you look at it. The new traffic opportunities are worth it.

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newsagency marketing
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