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

Small business retailers win on ethical employment compared to big business

Small business retailers including small business newsagents could leverage the negative press about Coles having underpaid its workers and the 7-Eleven scandal of employee underpayment.

These recent scandals are examples of big businesses behaving badly for they represent institutionalised behaviour designed to treat employees unfairly.

While not all big businesses are the same, Coles and 7-Eleven have high profiles, they would be considered respected brands by Australians. The scandals ought to negatively affect the performance of their retail outlets. However, their size and ad spend enables them to trade on without impact.

I think we in small business have an opportunity to speak about the systematic poor treatment of employees by any big business caught. We should say shame on them and remind our community that in small business it is more personal with employees closer to the boss and more empowered and able to address any pay anomaly.

When someone buys a magazine from a newsagent rather than a 7-Eleven the customer can have more certainty about the employee terms, the fairness of pay and that the newsagent is not engaged in a roster con that sees employees paid half or less than the law requires.

Sure any campaign or comment would neb negative. that is because 7-Eleven and Coles have acted negatively, unfairly, to their employees as the media and other reports have revealed. Their actions ought to have a significant cost to their businesses. We can help share our stories, comparing these stories to what it would have been like at Coles and 7-Eleven. We can do this to uphold small business retailers as good employers.

While it is possible there are unethical small business employers out there, their size means they can do less damage than a big business with a work force in the thousands or tens of thousands.

7-Eleven promotes their $1 barista coffee and Coles promotes that their prices are down. One way to cut prices is costs. Labour represents the first or second highest operating cost in a business. Underpay your staff and you can offer cheaper prices. It stands to reason.

In my opinion small business retailers should talk about the issues more, making the most of the bad behaviour of Coles and 7-Eleven.

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Ethics

A tough day at the office for Pacific Magazines as some magazines cease print editions

Pacific Magazines has today announced the closure of Your Garden magazine, the move to digital only for Bride to Be and Practical Parenting and the end of the licence for Prevention, which will see Pacific bring to an end its publishing of the title.

These are tough decisions, affecting the lives of many. Pacific is not alone in adjusting its magazine publishing business in response to market conditions.

Here is the announcement from the company.

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This announcement is a reminder to newsagents to ensure they are developing sustainable traffic drivers for their businesses as the disruption to print is not only affecting publishers.

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magazines

Why are governments handing taxi drivers compensation for deregulation?

I was shocked to hear the number $800 million bandied about on radio in Melbourne Friday as the amount that may be paid to Victorian taxi drivers in return for deregulation in the face of competition from Uber. Any amount paid to taxi drivers is wrong in my view.

Then, I discovered the $20K reportedly paid to NSW taxi drivers and the $100M transition package for Queensland taxi drivers.

It reminded me of the hundreds of millions of dollars a year compensation for the TV networks from successive federal governments so the TV networks could deal with technology changes, right at the time of increased competition for them.

Back in 1999, small business newsagents had their exclusive territory ripped from them by the Howard government. No compensation was paid. I estimate that at least $500,000,000.00 was wiped from the value of the newsagency business assets as a consequence of the deregulation. I suspect the cost was more than the $.5B I estimated.

Some of the write down is being felt today as long-held businesses are sold.

Yet no compensation was paid to newsagents.

Compensation had been paid years earlier as the federal government forced the sale / closure of pharmacies as Australia had too many.

But no compensation was paid to newsagents.

The newspaper publishers and magazine publishers at the time offered no support of small business newsagents in pursuit of compensation. Some of those parties involved were robust in representations to government seeking compensation for TV networks.

Bow we see the generosity of state governments, conservative and labor, to taxi drivers to help them deal with deregulation.

Newsagents have every right to feel aggrieved.

On the politician side those around at the time of deregulation said newsagents were poorly represented. Maybe so but I would have expected greater care for newsagents than taxi drivers given the role back then of the local newsagent in the community versus the role of and respect for taxi drivers today.

With this latest taxi driver news it is clear newsagents were dudded. While there is nothing for today;s newsagents to gain, it is a reminder of how useless politicians are when it comes to representing their constituents. They look after themselves and their closest mates first followed by those who they feel could do them harm. Newsagents never made it into that top three.

If I had a say, I’d pitch that taxi drivers get no compensation for deregulation. You can’t have a free market, a global market and offer compensation. But, then, we don’t have a truly free and global market – only when it suits vested interests.

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Newsagent representation

Sunday newsagency challenge: trim labour costs

Labour cost in a newsagency should be between 9% and 11% of revenue where revenue is product revenue plus commission from agency lines. Labour cost should include fair market costs for all who work in the business. If your labour costs are outside this band and if your overall gross profit is average, your business is falling behind. My challenge today is to review your labour costs in pursuit of lower costs.

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Newsagency challenges

Sunday newsagency marketing tip: Father’s Day card promotion ideas

Too many newsagents cost themselves card revenue by not engaging with the card category. They think the success with cards it a matter for their card supplier. Such a view is wrong. Retailers have more influence over the success of cards in their businesses than the cards themselves.

Here are my suggestions for engaging with cards this Father’s Day:

  1. Talk about Father’s Day cards on your business Facebook page. Daily. But in a fun way – show off favourite images, play to your audience.
  2. Place cards at the counter. Have a pitch ready: have you got your Father’s Day card yet?
  3. Place a small selection of Father’s Day cards with magazines – weeklies or motoring or both.
  4. If the season has been slow so far this year, pitch an offer: three for 2 … do this Tuesday / Wednesday this week – where the other two cards could be any card up to a value you set.
  5. Include a Father’s Day card pitch on all receipts. Your software should serve this easily with little effort to setup.
  6. Have a prize for one Father’s Day shopper. We have a drone as part of an in-store Hallmark promotion.
  7. Offer a free stamp with every Father’s Day card purchased this week.
  8. Place Father’s Day cards in with your Father’s Day gifts.
  9. Keep the display fresh.
  10. Run several small boosted Facebook posts over the next week promoting Father’s Day cards and your business.

Plenty of retailers have Father’s Day cards, it is a competitive marketplace. The best way to compete is to be out in front. Are you out in front with your marketing of Father’s Day cards in your newsagency?

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Competition

Sunday newsagency management tip: remind shoppers they are being watched

IMG_2098A simple sign like this placed near popular products could be the difference between someone looking and stealing. The sign is a reminder of the surveillance in the business. While there are other ways to show pop;le they are being watched, a small sign like this can week too. It costs less than, for example, screen monitors placed in-store. Costing a few minutes to make and a few cents to print, the sign is good value for money. This is why it is my management tip today.

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Management tip

Retro diary helps reach more people for calendars

IMG_2105We are leveraging this retro themed 2017 diary from Universal as a call out to people who might otherwise think of diaries as bland and boring rather than connecting with a passion. This diary is an excellent example of an opportunity for promotion on social media and elsewhere to combat blindness to the possibilities of what people will find in your shop.

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Diaries

Educating customers to not pay full price for magazines

Further to my post yesterday about discounted magazines, here is how a different business in another airport looked yesterday morning when I walked apart. This is the message to passers-by.

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The key message people in this busy airport see is magazine bundles at substantially discounted prices. Even though these are only Bauer titles, they are in prime position, placed I suspect for maximum impact. This business might as well not have other titles in these categories.

I think it is nonsense to suggest shoppers will recognise these offers as only at airports given the other retail outlets that have them from time to time.

Airports started doing them time to time, now they appear to be permanent.

Deeper in tis shop yesterday Lovatts also has their discount pitch:

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While I love how the titles are displayed, I am frustrated they have joined the discount magazine party.

These publishers need to be certain of their long game and certain of the role they expect of retailers. So far, there has been no disclosure of this to retailers from what I understand.

As a newsagent I want the whole of the magazine department to be promoted with a fair supply model and a fair margin. Using us in a discounting turf war does not benefit us and leaves me wondering about space allocation in the newsagency.

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Bagged magazines

Are newsagents ready for a world of permanently discounted magazines?

In a newsagency at Adelaide airport earlier this week I was surprised by the extent of discounting of key magazine titles. While this has been happening for years, the extent on show in Adelaide was greater, leaving me to wonder when we will see this in all retail outlets.

Bauer and Lovatts are the two publishers engaged in this Adelaide location. While only two publishers does not sound much, their level of engagement is considerable. Take a look at these four photos from the one business. I could have included more photos of more facings beyond these:

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Anyone shopping here could reasonably wonder whether they should pay full price for any magazine. Indeed, the scale of the promotion in the business is so strong I expect it would damage shopper perception of the value of the titles – but, hey, I am not an expert in this area.

This promotion does not make sense to me as the retailer as it appears designed to lock a shopper into a publisher. I want to promote the whole magazine department, not just one publisher, certainly not one publisher where the margin dollars I make are cut as a result of a promotion like this.

But I suspect this retailer is not losing margin dollars as I suspect the publishers are compensating them to the value of the margin from a full cover price. When publishers have offered this type of promotion to newsagents they have not compensated to the value of the full cover price from what I recall. Even then, if they did, it would not be ideal in that you are not promoting the broad offer you have in-store.

I have made no secret over the years that I do not like campaigns like these discount bundle offers. I think they are bad on many levels. yet some publishers appear addicted to them.

While publishers have told me that transit is ideal for these bundled promotions, I have seen them too often in supermarkets, convenience outlets and petrol outlets. This does not augur well for newsagents who see magazines as a point of difference, something to value, something through which they attract key traffic. Educate that traffic to hunt for a bargain and you see your value as a specialist retailer devalued.

My question for newsagents is: Are you ready for discounted bundles of magazines to become the new normal?

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magazine distribution

Poor reporting from Australian Gift Guide on retail

The headline on The Australian Gift Guide article is disappointing: Seven major retailers facing collapse.

Why is this news? It reads as speculation. Why is this business magazine reporting it? Do they want to talk down retail?

The article offers no evidence for the core claim:

It’s all doom and gloom for some Australian retailers as they are facing extreme risk of financial ruin over the next 12 months according to a report by SV Partners.

The well-known retailers have an annual turnover of more than $100 million and include a large clothing retailer, two computer retail giants, one big supermarket/grocery store and a large newspaper/book retailer.

While the article goes on to quote numbers, it does not tie this back to the headline claim.

It is articles like this that cause bankers, landlords and others on whom small business retailer rely to look at us with suspicion. Thanks a lot Australian Gift Guide. Bad job.

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Newsagency challenges

Too many newsagents don’t know what they can sell in their businesses

A colleague newsagent had a customer waiting for them when they opened the shop at 6am Monday this week. The customer has driven almost half an hour to be at the store at opening time to purchase an item priced at $349.00. They wanted to ensure they got the item.

So, by around 6:05am, the business had completed the $349.00 sale and racked up $175.00 in gross profit. That is more than the business will make from newspapers in the day and close to what they will make from magazines in the day. From one purchase.

What a terrific story on several fronts: that the customer was there at the opening of the shop, that they had driven half an hour and that they would tell others about their experience.

This is the newsagency of the future is, a retail business allowing specialist sought-after products to define the business more so than the shingle, a business being unafraid to stock items way outside what is usual for a ‘newsagency’.

Way too often newsagents tell me they cannot sell expensive items in their businesses. Most times I hear this the newsagent making the comment has not tried more expensive items, they have not created the story in-store to ensure success with ore expensive items.

My message today is that what we can sell in our businesses is way outside what we think we can sell.

I know of newsagency businesses that have closed because the owners have not experimented beyond the barriers they established themselves for their businesses.

I appreciate it is tough to make such a move as it means ditching being an agent, becoming a retailer and trying products about which you probably have little knowledge. All it would take is someone you have never seen in your shop visiting and spending hundreds of dollars on an item once for you to tear down your barriers and seek out more on these opportunities.

The newsagent who achieved the $349.00 sale on Monday did so on the back of a special event they ran on the weekend that attracted plenty of new shoppers, some people travelling two hours to be there.

Gone are the days of you thinking about your newsagency as serving a territory.

This is a new borderless world. Attracting shoppers starts with buying beyond what is traditional for the business.

There is growth out there for the taking.

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Newsagency challenges

The broken magazine supply model: Gross oversupply of Just Bikes magazine

We usually sell one or two copies of Just Bikes magazine. We are being supplied 40 copies of the latest issue. 40!

Representatives of distributor Gordon & Gotch will say it is a mistake. The thing is – too many mistakes like this are being made. To make matters worse, the process of resolving such mistakes is time consuming and fault prone, costing newsagents plenty.

I suspect magazine publishers don’t know how bad the situation is.

UPDATE: 18/8 – Turns out I am not alone. Something is seriously broken here.

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magazine distribution

ACCC seeks feedback on proposed acquisition of APN News & Media Limited Australian Regional Media division by News Corp

On August 2, the ACCC wrote to interested parties seeking views on the proposed acquisition of APN News & Media Limited  Australian Regional Media division by News Corp. You can see the ACCC letter here. The closing date fore submissions was August 15. The ALNA (formerly ANF) emailed QLD newsagents on August 16 at 4:26pm seeking feedback for their submission.

Note the ACCC’s areas of interest:

The ACCC’s investigation is focused on the impact on competition. In particular, we are seeking your views on:

  • how closely News’ publications (including websites, where relevant) compete with ARM’s publications for the supply of content to consumers and the supply of advertising space to advertisers
  • the impact of the proposed acquisition on competition, and whether it will:

    • lower the quality of content, especially local news content

    • reduce the choices available to readers for local news content

    • increase newspaper prices

    • increase the price of advertising, especially in newspapers in Queensland and northern New South Wales

  • whether, following the proposed acquisition, there would be sufficient competitive constraints on News to ensure the relevant content and advertising markets remain competitive.

Attachment B of the ACCC letter outlines further topics for which they are seeking feedback. These could be of particular interest to newsagents:

4. If the proposed acquisition went ahead, would competition from other media suppliers in Queensland and/or northern NSW provide a sufficient competitive constraint on News to ensure it offers content/advertising on competitive terms? Specifically, which media suppliers might provide a competitive constraint?

5. Do you consider News, ARM or any other market participant, to be a particularly vigorous competitor in the supply of local or regional news and information in Queensland and/or northern NSW on aspects such as quality, range or diversity of content (e.g. local news/information), price, promotional activity or any other factor?

6. What impact do you consider the proposed acquisition will have on competition in the supply of local or regional news and information in Queensland and northern NSW generally or in particular regional areas? Please specify any particular geographic regions you are concerned about.

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Competition

WA and the UK show how to motivate lottery customers

IMG_1490 (1)The UK Lottery is promoted through the messages of good it does for the community through lottery ticket purchases. This message is pitched in all the collateral used in retail, including the front of store promotional unit I saw recently when in Manchester.

The headline of THANK YOU stands out, reinforcing the message of good purchasing lottery tickets does.

I think this plays a role in driving sales. It also connects the business selling the tickets with the good words done as a result of the lottery ticket purchases.

Western Australia is the only state or territory in Australia where this level of community connection remains, through Lotterywest. In WA, they, too, promote the community connection in-store and elsewhere.

I think this is an important differentiator, especially with the rapidly rising profile of Lottoland and the takeover of lotteries everywhere in Australia except WA by the publicly traded Tatts Group.

We know from card sales at Christmas time that plenty of Australian shoppers appreciate supporting the community work charities through deliberate of purchases based on charities supported.

If I was an influencer at Tatts I’d be urging the company to deeply engage with a beloved charity in Australia, I’d want the company to link good community works to the purchase of Tatts lottery products.

While the company does engage today, it does not do so in a way that translates to a message at retail and I think this is where it misses out.

The Tatts / Lottoland comparison shows the difference is primarily in how products are sold – at least that is the perception pushed by the high-rotation Lottoland ads.

I think Tatts needs to change the conversation and following the British and WA lead could be worth considering.

At the same time I’d urge Tatts to pull back on the highly regulated approach to its independent retailers. I’d suggest they have one metric – sales. This would improve the love retailers have for Tatts and that, in turn, ought to improve sales.

Lottoland is running an aggressive race and Tatts currently appears to be way back in the field. It needs to significantly change its approach if it is to catch up.

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Lotteries

Where ransomware starts

Here is another example of the start of a ransomware attempt. This email comes in and the immediate reaction is this isn’t for me. Being a suspicious type I don;t click on it. Plenty of newsagents are and this is why they are being locked out of their computers.

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If an email looks suspicious, don’t open it just to check it out – you will be locked out as happened to two newsagents I know of today.

Read my advice from the weekend.

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Newsagency management

It is time for newsagents to be able to purchase stationery from suppliers direct

For decades newsagents have had to purchase stationery through one or the other of the newsagency stationery wholesalers.

Even when the supplier rep has been in-store, written up the order and, on occasion, supplied stock, the ‘order’ has been turned back through the wholesaler – for a premium … kind of like a tax to support the warehouse.

This order turn back has been a tax on newsagents, making their purchasing cost higher, all in the name of supporting the newsagency stationery suppliers.

What has the order turn back approach achieved? Are the stationery warehouses stronger as a result? Have newsagents themselves benefited by paying a higher price for stationery, have they received some other benefit as a result? No, I think the approach has had its day, I think it has not achieved anything and, today, it only acts as a tax.

For newsagents to be competitive in stationery, especially, with branded stationery, I think we need to be able to purchase directly without any additional cost being imposed to support a warehouse that often does not add value to the transaction.

By dealing direct in some cases we will have access to a broader range of product. This will facilitate specialisation, helping to drive sales.

Suppliers don’t need to increase their costs by increasing in-store contact with retailers. Rather, they should ensure they have a best practice website through which newsagents can order and see new products.

In my own newsagencies my focus 100% is on national brands of stationery. I want to go deep for some brands, to ensure a strong visual story in-store and online. I am better able to do this if I can go direct.

So, yes, I think it is time for stationery suppliers to offer direct accounts to newsagents, to enable those who want to specialise and go deep with a brand to do so.

Sure, there will be some newsagents who still want to go through the warehouse, and they can.

The world has changed and how we buy stationery needs to change. As I wrote recently about GNS, the model needs a shake-up for it to have a future.

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newsagency of the future

Mocking of innovating newsagents is mean spirited

It disappoints me when I hear of a newsagent, a supplier or someone else connected with the newsagency channel mocking others who are innovating with a brand, product category or in some other way.

Those innovating in our channel ought be cheered, not mocked.

In my experience, those mocking tend to be people who are not innovating in their businesses. I suspect their mocking is a reflection of how they see themselves and their business. But rather than address the failure in their business they mock others so as to deflect from their own failing.

I recall an instance a couple foyers ago when someone mocked several newsagents for a move they were making. It turned out the move was the right one, delivering to them excellent results. The person mocking made no such move and missed out as a result. While that sounds like justice, it is not for there are some who listened and missed out too.

People mocking innovation need to understand the power their mocking can have. They should ar the very least pitch an alternative. Otherwise, the mocking can only be seen as mean spirited.

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Competition

Eight Wild Cards and Gifts stores for sale in NSW

Eight Wild Cards and Gifts businesses in NSW are listed as being for sale. In each ad is details of the franchise structure:

With a low franchise fee of 4% + GST, no marketing fees and a low franchise fee of $42,000 + GST we offer our franchisees our competitors simply cannot. The level of support we offer our franchisees is second to none, from training and store operations to stock selection, marketing and promotions, all of which is covered by the low 4% franchise fee.

Further on in the ad is this:

No other Card and Gift group offers the potential for profit equal to Wild franchisees

Wild is owned by the UK WH Smith group.

Researching online I found two businesses – a Wild and a Supanews – for sale in Queensland. Supanews is another franchise business owned by WH Smith. Another business had 18 Wild businesses listed.

I have no insight on what is happening here. All I know is the businesses are for listed sale.

This interests me because the parent company, WH Smith, is massive in the newsagency space in the UK. In Australia they are in newsagencies in a small way as well as transit and gift. I suspect they need/want more retail outlets here to justify their investment in the country.

This is a space to watch.

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Competition

Sunday newsagency management tip: how to avoid ransomware

Ransomware is affecting more and more newsagency businesses. Here is advice to help reduce the opportunity of attack and the impact if you are attacked:

  1. Ensure you use professional, up to date, virus protection.
  2. Ensure you have a good firewall with strong settings.
  3. Do not click on emails or attachments unless you are sure of the sender.
    1. Be particularly wary of ZIP files in emails.
    2. The ATO will not email you.
    3. Your bank will not email you.
    4. Australia Post will not email you, not like the example I have posted.
  4. Ensure all passwords you use are strong.
  5. Consider using an email filtering facility.
  6. Do not allow remote access to your computer unless you are certain of the person accessing.
  7. Ensure you have strong passwords. A strong password should include: some CAPS, some numbers and at least one special character. Check your password at: https://howsecureismypassword.net
  8. Change your password regularly.
  9. Run an up to date operating system.
  10. Have rules on computer use: no games, no online gambling, no porn, no personal emails.
  11. Have an overarching rule: do not open any email or go to any website unless you are certain.
  12. Use a cloud backup service like the Tower backup service. This provides the fastest recovery.
  13. Have multiple backup devices for additional protection.
  14. Do not use automatic file replication programs / facilities such as Dropbox or Google Drive. If a file is encrypted with malware / ransomware it will upload to the account and infect other files.
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Management tip

Sunday newsagency marketing tip: pitch to what people love

IMG_1941People love their dogs. Pet shop owners will tell you of dog lovers who spend more of their dogs than they do on themselves. Some retailers miss the opportunity of pitching to dog lovers in their gift departments, they miss the opportunity of shopper engagement. Dog lovers engage when they see gifts representing breeds they love.

In buying products for your store, think about your customers, buy for them, buy what they love.

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marketing

Sunday newsagency challenge: change weekly

Sketch out the layout of your shop on a sheet of paper. Draw a line across the front two metres. Commit to complete change of the pitch in this front two metres every week. Do this for a month. In most newsagencies, complete change in this frontline space weekly will increase sales. The challenge is the time involved and the need for fresh products to be pitched in the space.

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Newsagency challenges
Trending Articles

Fairfax changes approach to TV Guide, disrespects newsagents

Published on April 20, 2011

What do you think of the Powerball changes?

Published on February 16, 2018

IPS releases new magazine contracts

Published on June 21, 2011