We are managing the bulk of the Neutrogena gift with purchase with InStyle by Careful placement within our magazine fixturing. The title is selling well so the additional space allocation will not be for long. I’m happy to take the space as the gift shows us off as a retailer offering additional value. It’s a good point of difference for us.
The ANF endorsed and promoted Hubbed is being promoted to newsagents today via a six page note sent under the name of Hubbed and POS Solutions. It reads like a joint promotion, with bold claims to try and drive interest.
For those not familiar I declare I own Tower Systems, the newsagency software company with 1,900+ newsagents as customers. POS is my competitor in that business. They had around 600 newsagent customers last time I checked. I mention the numbers to provide context, not disparage. But this post is not about competing with POS, this blog is not about my business.
This post is about questions newsagents should have after reading the Hubbed marketing material.
I do not want to see newsagents lose money on something that is not based on sound research. I am not saying that applies to Hubbed as I have not seen anything approaching research. If they have good research then they should share the facts.
On page one there is this claim: The ConnectPOS system is designed exclusively for newsagents top offer a new range of products and services to customers. Newsagents already have access to parcel service and prepaid visa cards. Okay, bill payment is new but there is no commercial upside in that from what I can see. They then say ConnectPOS provides growth with new products, services and increased revenue. Why don’t they quote the growth achieved by the newsagents who have been running this for six months and more? The rumour is it’s not generating worthwhile commercial results. Only data we can verify can counter such rumours. I’d happily publish the data to counter the rumours.
When quoting newsagent results they need to indicate the terms on which those newsagents accessed Hubbed. It is important everyone can be certain all are on the same playing field.
The flyer on page 1 claims Hubbed also offer high commission to the newsagent with the cheapest prices to the customers. maybe there is a reason others charge more and have a more modest commission structure. I’ve been told by someone I’d expect to have good knowledge that Hubbed people met with representatives of a major logistics company who refused to deal with Hubbed because they model was flawed. I’d like to know if there is truth in this report.
On page two of the fax they say newsagents with Connect are selling between 10 and 30 parcels a day. They should publish the details of all Connect newsagents so this claim can be verified.
On page three is the claim that POS Solutions has worked exclusively with Hubbed to create ConnectPOS. It is exclusive. Hubbed did not approach any other company I am told. I am told the exclusivity arrangement is for no more than six months. I’ve seen the integration. I think it’s pretty lame. But for a couple of keystrokes you could do this on any computer running any newsagency software.
Page three ends with – join the growing list of newsagents that are embracing POSBrowser with integrated ConnectPOS! Newsagents should ask for this growing list so they can verify the claim. Otherwise, it remains a sales pitch without evidentiary support.
Page five says: Over the years Newsagents have watched staple product sets that belonged to them in large part become commoditised with other retailers now taking the significant share. While this is true, none of the Hubbed products are in this space so I am not sure why they would make the statement other than to sell through fear.
Fear is a massive factor here. Newsagents who are not great retailers want someone to fix their businesses for them. Hubbed is being pitched as this. But it will not fix a troubled business. The only way for a newsagent to fix a troubled newsagency is for them to take control of their business, embrace change and plan in the budget, on the shop floor and through buying for a brighter future. In my own newsagency my sales are up double digits year on year. I don’t have Hubbed or anything like it. I’m doing this on the back of flat traffic in the centre and extraordinary competition from small and large businesses.
Newsagency growth comes from future focused products. Hubbed products and services are rooted in the past.
On page five they go on: other retailers are good at seeing what is in demand and taking advantage of it. How does that connect to Hubbed? Other than the parcel offering that we can get through others too, what products and services are in high demand where demand is growing? Here is their fear pitch again.
Back to the issue of what newsagents have lost over the years and are losing today: lotteries, magazines and stationery. These are the key products lost. Where is Hubbed in any of these? Nowhere from what I can see. I make this point to underscore the fear they are using to encourage newsagents to go with them yet they are not offering anything to address the items in their fear mongering.
On the last page is a claim of a special offer from Hubbed and POS Solutions. My own experience is that something that is exclusive is not as keenly priced as something that has competition. If Hubbed really wanted to save newsagents money they would have made their platform more available than with only one company, they would have, from the outset, demonstrated an understanding of the commercial reality they write so much about in their marketing material.
Even on the best assessment, Hubbed will not generate the kind of return a newsagent can get from being a good retailer.
Between Jan. 1 and Mar. 13 this year in one of my newsagencies we have increased our plush sales $4,743.18 (ex GST). We are projecting an increase for the whole year of in excess of $35,000.00 in plush sales (ex GST). This will add $19,250.00 gross profit to our P&L from this category alone. There is a correlation between plush sales and gift sales and card sales. The plush increase will, in fact, translate into close to $48,000.00 additional gross profit from the three categories.
Once you add in 18% year on year greeting case sale growth you have a wonderful business story despite the doom and gloom talk being used in this unfortunate flyer.
My newsagency is in a shopping centre with 300 other shops, several majors, many gift shops that sell plush and several specialist large card shops. Yes, it is a very competitive environment. With flat foot traffic in the centre.
The future of the channel for good retailer newsagents is bright because we can make it so. We can create strong, growing and profitable newsagencies by being good retailers where we have control through what we stock and how we merchandise it. It starts with us choosing to be a retailer and not an agent. Next is you taking a realistic view of your business and building from there.
I acknowledge that some newsagents will like the Hubbed approach and will benefit from it. If you think this is you, I urge you to do your homework and be 100% satisfied with all you are promised. If, once you have done this you like what you see, go for it.
Bauer media yesterday sent a flyer and an agreement to newsagents for a Mother’s Day consumer promotion and an on-going Promote and Profit campaign.
While the key pitch of Profit and Promote is an opportunity to earn 50% bonus commission, the agreement Bauer wants newsagents to sign says the 50% bonus commission will be paid on incremental sales – sales in the retail store (not subs) above a sales target. The sales target is to be set by Bauer.
So, if your sales are $1,000 and your sales target is $1,200 and you sell $1,500, you get 50% bonus commission on $300.
With the average newsagency reporting magazine sales decline of between 6% and 9% year on year, any sales target should reflects and not have a base of greater sales than being achieved today.
The Bauer material says you will receive individual stretch targets based on historical sales. If done properly it should be a forecast based on year on year trend. i.e. if you are declining it should be reflected in your target. That targets have not been sent with the document means newsagents do not have enough information to sign the agreement.
I am all for incentive programs. However, they must be easily understood, have realistic goals and reflect current conditions. The documentation as presented for Profit and Promote is too complex and has too many unknowns for active newsagent engagement in my view. I’d love others to share their views here.
With the Rolling Stones on the cover of Rolling Stone magazine and with their Australian tour cancelled in tragic circumstances and with a Phillip Seymour Hoffman feature this issue of Rolling Stone deserves time under the spotlight. I’d urge newsagents to place the title with newspapers for a week.
With plenty of gifts available that sell to vintage enthusiasts, Vintage Bride is a magazine we could place outside the magazine display to attract interest from collectors as well as from those interested in vintage themed weddings. This is a terrific magazine – deserves extra promotion as it reinforces our specialisation.
The latest issue of Time Out Melbourne is an excellent opportunity to tap into vintage interest and we’re doing just that with the title on show where vintage enthusiasts will see the title and hopefully purchase on impulse. This is another example of a magazine cover giving is a fresh reason to promote the title.
Part of the MH370 headline on the front page of the Herald Sun newspaper today is obscured with a post-it type ad for Bakers Delight. This junks the product and disrespects the news in my view.
It’s disappointing to see News Corp. stick a discount home delivery subscription ad over the top of the photo for the lead story – on the disappearance of MH370 on yesterday’s newspaper. This sticker and the offer it promotes disrespects news and trashes the brand by making the purchase about price.
Check out how Totally Speedway is calling out to their fans on Twitter to get the latest issue of the magazine from today in newsagencies. This support for special interest titles is especially welcome as stocking them is a point of difference for us.
Newsagents this week received a fax purportedly sent by Crimvid, a supplier endorsed by the ANF. Click on the image to see the main page of the fax in detail.
Before I get to the fax itself, I’d like to raise the question of how Crimvid got fax numbers for newsagents.
Did the ANF provide Crimvid with these? If this is the case, has the ANF breached the Australian Privacy Principles that came into effect on March 12, 2014.
The Australia Privacy Principles are clear and data cannot be used for a secondary purpose.
The ANF has newsagent contact data gathered for a specific purpose that does not include use by a third party.
Hence the question: where did Crimvid access the fax numbers of newsagents?
Now, to the fax itself. What a poorly written document. read the first paragraph and see for yourself.
I’m told that content presented at a Hubbed / ANF pitch in Cairns this week reportedly contradicted the statement published here from former Hubbed chairman Matt Handbury. It’sbeen suggested, too, that there is growing inconsistency between Hubbed offers. The ANF ought to sort this out otherwise members may be disadvantaged.
newsXpress this week is hosting it’s first of two national conferences this year in Melbourne.
Monday was a buying tour of the Toy Fair – appointments with key suppliers offering trade show specials and products insights.
Yesterday was a full day conference at the MCG and a trade show with 30 suppliers pitching a broad variety of products. The conference agenda included an industrial relations lawyer speaking about Fair Work and unfair dismissal, a social media expert speaking about how to engage your business in valuable social media opportunities, an insight into high-value collector shoppers, pricing and range advice to drive margin dollars in ink and the previewing of greeting card customer engagement opportunities.
Proactive sessions to drive newsagency traffic and build basket depth.
The conference yesterday had 150 people participating. Just over 100 newsagents. The feedback on the day and last night at the BBQ dinner on the Yarra River was excellent. Better still, nowhere at the conference or socially was there any discussion on industry politics. Nowhere were people talking about tough times. The mood was optimistic and the overall feeling one of excitement and happiness. It was a thrill to mix with happy newsagents.
Everyday there are choices we can make about our businesses and how they impact on our lives and our outlook. Leaders in our channel – in supplier businesses, associations and elsewhere can set the agenda for newsagents. For too long the agenda has been rooted in the past and focused on being adversarial with suppliers.
Working together optimistically can like-minded newsagents and suppliers do well. I saw plenty of that yesterday. I’m a Director of newsXpress so of course I’ll talk up the event. I’m certain, however, that anyone else there would agree with what I have written. Anyone organising a conference or similar event for newsagents needs to be able to write the same – to share the pleasure of a nurturing optimism in newsagents and connecting them with suppliers who share this and who offer opportunities through which we can navigate to a bright future.
I’m not writing this post to encourage people to join newsXpress. I;’m writing it because the event yesterday and indeed over the three days is different to the usual newsagency conference. It’s more forward looking and full of hope. Most of all, the newsagents participating shared an energy and excitement that was a thrill to be part of.
Every newsagent who owns or has owned a newspaper distribution business has experienced the theft of home delivered newspapers. I experienced it years ago before I sold my delivery run. In one instance a resident at a church run retirement village was regularly stealing the paper delivered to a fellow resident.
I know of people who have been caught who say it’s a victimless crime. It’s not, of course. The newsagent carries a considerable cost – replacing stolen product, making good the situation and often soaking abuse from the customer.
I’m opening the topic here for discussion following recent comments on another threat. Over to you…
Several newsagents have mentioned to be deals they have reportedly been offered by Hubbed that vary from the deals more generally known about. If I understand it correctly, one was offered preferential pricing and another a promise on returning equipment if sales don’t meet expectations.
If true, the ANF appears directly involved in making offers different to those promoted more widely. If I was a newsagent on a less favourable deal and heard about a better deal now I’d be wanting compensation.
I like this poster I saw in the US a couple of months ago in the window of an American Craftsman shop in New York. They sell hand-made gifts and craft items – beautiful products.
The message pitched on the poster is clear – buy American mad products and create jobs.
Buy local messages don’t result in a change in behaviour in my view because of a the lack of consistency in pitching that message and a lack of detail. This poster pitches a clear message. yes, there is a lot of detail – but the retail is important as it tells shoppers that changing what they spend 10% of the holiday spending on can make a difference.
With this poster spread around Melbourne, 7-Eleven makes a pitch that should have been owned by newsagents. Years ago, while the myki public transport ticketing system was barely a thought, 7-Eleven trumped newsagents and negotiated unprecedented access to offer top-ups.
While newsagents were offered similar access it was on a store by store basis. 7-Eleven established itself as the only network consistently offering myki product access. This is, in part, what allows them to run the strong ad campaign reflected by these posters.
Newsagents are losing the fight for relevance in convenience retail in part due to the commercial power and strong leadership of 7-Eleven and in part due to a lack of consistency of the newsagency offering. Whereas decades ago we were strong convenience retailers, today I’d say less than a third of newsagency retailers play i the convenience space.
Convenience newsagents need to connect with a convenience brand if they are to more successfully combat 7-Eleven. More than this, they need to follow the leadership of a brand and act consistently with any such group.
In the convenience space, a one size fits all approach is vital.
I had a good look around Toy Fair in Melbourne yesterday and spent considerably on new products and replenishing stock of products we already sell. Just about every aisle at the fair had opportunities for newsagents including licenced products connected with licences we sell today. This is the type of trade show newsagents should attend – you’d see traffic generating opportunities and basket building opportunities.
Just over a year ago we could not get enough One Direction magazines to sell. Today, there is almost no interest in magazines featuring the boy band. Despite good position support and co-location, The Directioner magazine is not achieving sufficient sales to pay rent for the pocket it occupies. Is the 1D phenomenon over? Maybe it’s a regional challenge.
Matt Handbury contacted me over the weekend and provided this statement in relation to Hubbed:
Hubbed: Setting the record straight
In response to speculation about the operational performance and governance arrangements at Hubbed, I feel it is in the best interests of the newsagent community
to provide some much needed clarity around these issues.First, I can confirm that I have resigned as a director of Hubbed, and that my substantial investment as a shareholder is yet be repaid.
Given that legal proceedings are pending, I do not wish to comment further on this issue, other than to say I no longer have confidence in the management of the company. My involvement with the board and management of Hubbed has come to an end.
My experience with Hubbed has deepened my conviction that harnessing the power of e-commerce will provide significant and sustainable new revenue streams for newsagents. It can also greatly enhance newsagents’ services to customers and the publishers and e-retailers they serve. I am determined to bring this to reality and you will be hearing from me in the coming weeks.
All newsagents, both those already dealing with Hubbed and those considering how to embrace e-commerce in their business, can rest assured that their interests will be served and their expectations and ambitions more than met.
Matt Handbury
Executive Chairman
Murdoch Media Pty Ltd
I am publishing this statement with Matt’s permission.
The ANF and other newsagent associations have been provided this statement.
I originally published this post yesterday, March 16. I reset it this morning as the content is important and blog traffic on a Monday is 1,300+ visitors whereas on a Sunday it is usually between 650 and 800.
Claredale Distributors, a company with 36 years in the adult products space, has started Gifts and Gags to wholesale adult fun products to the buck’s and hen’s nights type customer.
While not for everyone, the opportunity is to offer products with good margin that previously was only in specialty adult shops – a retail channel that has a shrinking footprint.
Magazine publishers invest considerably in promotions, providing collateral for displays, valuable consumer prizes and financial incentives for newsagents. While we put up displays to engage, it’s the more subtle engagement that I like the most – like the coupon we have on the bottom of all receipts at the moment promoting the WIN A CAR campaign from Pacific Magazines. This coupon is included without us having to think about it. Our customers, when they get home and open their bag, will have a reminder about the promotion. This extends the reach of the Pacific promotion and it connects our business with this.
The more we structure our business processes to connect with and support supplier promotions the bigger the pay off for us. The investment is minimal.
Data from January 1 through March 13 2014 compared to the same period in 2013 indicates a 28% increase in sales of TV Week magazine for us. It’s an increase I wish I could explain as being a result of additional promotion or extra focus. The truth is that we have done nothing different. The title is where is’s been for more than a year – a good location with weeklies but nothing stand out. While I am thrilled with the sales growth I wish I had an explanation.
The Easter theme of the latest issue of the cake decorating partwork is an excellent opportunity to promote magazine as part of the Easter pitch. Indeed, this issue could be used to attract shoppers interested in cake decorating who then browse the broader Easter display you have on show. This is another way to leverage magazine sales into a deeper and more valuable basket.
Employees can make or break a retail business, they have your livelihood in your hands yet how often do you let a new employee loose on the business with a fraction of the training they would receive before being allowed to drive a car? Too often, I bet.
Small business newsagents need a new employee induction process that includes minimum training necessary before they can undertake any work. There also needs to be an on-going training program that ensures new and even existing employees are properly trained to best serve your business and its customers.
I am not talking here about the formal courses in retail available through the public education system or privately, no I am talking about training you prepare about your business. Yes, you. Your business is an asset to be nurtured for you and your family and that can only be done by people who are trained in what you need and how you want things done. So, you need to develop training.
If you think your customer service is a unique selling proposition for your business then structured training of new employees is essential.
You should also look for training from your product suppliers. They may have training available in their products. Card companies, for example, could train your staff on how to restock. Collectible plush companies could have training on their collections. You should speak with your POS software company. My software company has a 130 video curriculum for newsagent employees with each video running 8 to 10 minutes.
A consistent approach to training new employees will improve the consistency of the business and this will reflect in the performance of the business.
Now more than ever we need to tell a story on the shop floor of our retail newsagencies. We need to do more than expect products or a single display to work on their own. We’re competing for attention and the best way to get this is with displays of depth.
In retail today, we need to connect products and ranges from suppliers and bring them together to offer a more complete pitch to our customers. The better the story the more we sell.
This is what telling a story in retail is about – offering depth to a brand, a range or a buying opportunity or occasion.
Here’s a simple example of story-telling in retail. The photo shows placement of the Hallmark licenced AFL range of cards, wrap, team song buttons and other items, the Beanie Kids licenced AFL range for 2014 and, in the middle, the AFL record for the AFL season opener. This is a story – pitched to AFL fans and people who buy for AFL fans.
While the Hallmark stand or the Beanie Kids stand on their own has depth because of the products on offer, they each are not enough of a story in my view, not enough to attract the number of shoppers we need to achieve the sales and, in particular, basket depth necessary to give us the sales rewards we need.
The three displays together deliver better value purchases with more customers buying from each than if the stands were separated. This is a key commercial value in taking time to tell a story.
It can be hard work telling a story where you don’t have a unifying licence or brand to work with. It can take some misses before you find out the stories that work best in your business. Invest the time, tell stories and compete with big competitors who have a head office dictating the stories they tell.