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

Magazine distributor Gordon & Gotch harasses newsagents on payment

Gordon & Gotch this morning emailed a newsagent claiming that their account is overdue when there is still half a day left to pay the bill.  This is appalling treatment of this newsagent by Gotch, a company that does not provide newsagents with reasonable control over their level of indebtedness. I suspect others have received the same email.

Here is today’s email from Gotch to one newsagent:

Dear Customer,

We take this opportunity to remind you that your January 2014 account was due on the 20th of February and is now overdue.

Regrettably supplies to your outlet will be suspended unless payment is received promptly.

Please see payment methods below:

· Direct Deposit (Bank details) ANZ Banking Group,
Cnr Queen & Creek Streets Brisbane, QLD.
BSB: 014 002 Account: 7758 12207
(Please use your Gotch Billing account number as reference)

· Credit Card using GotchConnect Please note that only Mastercard and VISA accepted

If you require a copy of your statement, please log on to www.gordongotch.com.au to view / download.
For any queries or clarification, please contact your credit officer on 1300 650 111.
We thank you for your cooperation.
Yours Faithfully,

National Credit Department

Some newsagents actively discussing closing their magazine accounts down.

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Ethics

ANF seeks ACCC authorisation to negotiate with 100+ newsagency suppliers

The ANF has applied to the ACCC for authorisation to engage in collective bargaining with many newsagency suppliers. I first heard about this when I received notification as a director of newsagency marketing group newsXpress and then a second notification as a director of newsagency software company Tower Systems.

I know that some suppliers are surprised they heard about this from the ACCC and not the ANF. I agree with them. Lack of communication from the ANF reflects extraordinary disrespect of suppliers – suppliers it calls on to sponsor events and fund other activities. This will feed distrust among suppliers about the motives of the ANF.

Take my own position, for more than thirty years my software company has faithfully served newsagents. The relationship it has with its 1,900+ newsagent customers is sound and stable. I can’t see the ANF as having anything relevant to represent newsagents on. I am suspicious as to their motives.

Given its own commercial activities, my view is the ANF is conflicted in seeking this authorisation. The last information released indicated it was a shareholder in one supplier offering a broad range of products and services. I also understand it received commission or other compensation for promoting other products.  These commercial relationships challenge the position it could take in any collective bargaining.

Here is the information on the public registers page at the ACCC website:

The Australian Newsagents Federation is seeking authorisation in its own right and on behalf of its Member State Branches, the Newsagents Association of NSW and the ACT, and the Victorian Newsagents Association to engage in collective bargaining. The Federation proposes that a national bargaining group be formed to represent member newsagents in negotiations with a range of suppliers, classified by the Federation as:

  • Insurance brokers
  • Business opportunities
  • Drinks- non alcoholic
  • Phone Cards
  • Greeting cards and wrap
  • Stationery
  • Banks
  • Newspaper publishers
  • Magazine distributors
  • Marketing Groups / Franchises
  • Tobacco
  • Confectionary
  • POS Providers
  • Broadcast and communication service providers
  • Electricity providers
  • Transport companies
  • ATM service providers
  • Service stations
  • Shopfitters
  • Commercial landlords

The Federation notes that the suppliers as identified by the application may change over time. The Federation also proposes that local bargaining groups be formed to negotiate with suppliers in particular circumstances.

The ACCC is currently seeking submissions from interested parties. Submissions should be lodged at adjudication@accc.gov.au by 4 March 2014.

Given that the ANF has not communicated its intentions with suppliers, it would not surprise me if they had not communicated with their partner associations – NANA and VANA.

I deal with associations in a range of retail channels and this is the first time I have seen an association seek such authorisation. Other associations approach suppliers in a relationship-building way.

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Newsagent representation

Oops – stinky chocolate

choccandlesSaw this is a shop last week: Lindt chocolate placed with scented candles. I learnt from my own placement mistake many years ago to not place chocolate with scented products. I did mention something to the staff member at the counter but got the impression they did not care.

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confectionary

Here’s one way newsagents are driving magazine sales

winacarThe WIN A CAR promotion from Pacific Magazines is lifting magazine sales in some newsagencies I have spoken with this week. Some say customers recognise the campaign from last year. Others say it’s working because of their promotion. The simple message gets people browsing the titles and this is the first step to a sale.

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magazines

BBC making a documentary on tobacco and plain paper packaging

I have been contacted by a producer working with the BBC on a documentary about smoking and the tobacco industry, and one of the issues they are looking at is plain packaging. Here’s part of the email explaining the project and their need:

We are very interested to find out what the consequences have been for retailers.

We are filming in Melbourne in early March, and we would really like to film with a newsagent owner, to talk about how things have changed since plain packaging was introduced. For example: Are sales up or down or the same? What do the customers say about plain packaging and the graphic warnings. Is it worthwhile continuing to sell cigarettes?

Also we would like to film some visual footage of the shop layout – concealed tobacco products etc. Perhaps film re-stocking shelves, or shipment of cigarettes arriving the store.

The documentary is being made by BBC producer Michael Rudin and presenter Peter Taylor. It will be broadcast in the UK later this year. The UK is currently debating whether they should introduce plain packaging – which is why we hope to look at how it is going in Australia.

If this is something you contribute to please email me and I’ll pass your details on.

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Tobacco sales

Small Business stories aren’t sexy or emotional enough to make the front page

Even in their demise big business trumps small business when it comes to the news. I guess it gains more clicks and sells more newspapers to report on 1,000+ job losses at a big business than job losses of 1,000+ at 300 or so small businesses.

While the news in Australia is currently dominated with reports of the planned closure of various car plants and, now, the closure of the Alcoa plant, these are just part of the story of the economic restructuring occurring within Australia.

In several small business sectors we are seeing restructuring resulting in business closures and layoffs.

But let’s not dwell on the doom and gloom. In small business sectors we are seeing new business start and existing businesses expand. Even in the newsagency channel I am seeing new businesses open as well as existing newsagency businesses alter direction of their model in pursuit of new opportunities.

Yet media outlets are not chasing these turnaround stories, especially small business success stories. It is as of only bad news sells clicks and newspaper purchases. This is frustrating because there is plenty of good news in small business circles and in newsagency circles. Reporting these stories could show others opportunities they are missing today.

In the newsagency channel, one of the most compelling stories is newsagents who are transitioning their businesses from the average gross profit model of 28% to 32% to a model of 40%+. This is hard work. The results are exciting. It’s a story to report – the reinvention of the quintessential small business in Australia.

What makes the unreported small business success stories better is that most are achieved without the government handouts that successive federal governments have given to big businesses for decades.

The media and politician obsession with big business is frustrating.

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Small Business

Tatts equipment changes challenging SA newsagents

South Australian newsagents are in a world of pain at the sales counter as Tatts rolls out their new terminals. They are having to deal with the new terminals sitting on the counter next to the old terminals for weeks as the roll-out, commissioning and de-commissioning proceeds.

Newsagents in some other states will understand having endured the same process.

I wonder if Coles, 7-Eleven and other national retail chains would put up with such a disruptive roll-out process.

The impact on a newsagency business is considerable – reduced sales as a result of access to the counter being blocks, OH&S risks, elimination of a busy work area and the knock on effect of these including, in some case, having to hire extra staff to deal with required temporary operational changes – since work cannot be done at the counter.

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Lotteries

Free magazines in South Korea

skfreemagsA colleague travelling in South Korea sent this photo showing copies of Grazia magazine being given away. In the background you can see the bundles of magazines to be given away.

With an estimated 98% of South Koreans owning and using a mobile phone to access news,  TV and internet, it’s reasonable to speculate that giving away magazines is essential or whether it’s supplementary like the mX free newspaper strategy.

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magazines

Great visual merchandising tips at Gift Fair

tagtopmodelIn addition to offering excellent buying opportunities and connecting with new suppliers, the Sydney Gift fair also gave newsagents and other retailers a chance to see visual merchandising opportunities from a brand / supplier perspective.

Take the Top Model range from The Aird Group, I appreciated seeing the brand on show as you can see in the photo – how they grouped products, the branding and products we don;t carry today. This display helped Top Model stockists to better connect with the brand.

Top Model is an important brand for us as it it an opportunity for us connecting with one group of customers who might otherwise shop at a Smiggle or similar store.

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Gifts

Being a convenience newsagency involves more than putting in a drinks fridge

cstoresydThe traditional Aussie newsagency has all but disappeared from Sydney’s CBD. In their place, and in far greater number, we have convenience stores. It seems that every block of Sydney’s CBD has two or three convenience stores.

These convenience stores all look the same – they have (overall) the same range, the same prices and offer the same service.

While it would easy to criticise the convenience stores in Sydney as lacking an Australian-ness and not covering anything like the range in a newsagency, they own their space and serve a need. They must be successful given their number.

Thinking about these convenience stores and newsagencies that have taken on convenience retail yet retained a newsagency focus, I find myself wondering about the competitive positioning. Being a convenience store is its own thing: you are chasing shoppers with little time who are in your store primarily because of your location. While destination purchases are up, the mix of what you sell is very different that of a more traditional newsagency.

Newsagents competing with or considering competing with the growing number of convenience stores and their strong banner groups need to think carefully about their own business, they need to decide whether they fully embrace the convenience model opportunity. They need to decide if they are prepared to become a convenience store and stop being a newsagency.

While I am no expert in the convenience space, I don’t think it is something you can half do. You’re either a convenience focused business or not.

If you are a convenience focused business then it informs all your business decisions: ranging, pricing, displays, customer service. This is where the business plan would diverge from the traditional newsagency business plan, it is why newsagents who see themselves as operating a convenience business – in the true sense of that type of business – need to fully embrace it.

Now for clarity I want to note that I am not talking about newsagencies that are convenient because of parking. No, to me, a convenience business is one located for high volume foot traffic, open long hours – into the night – and covering a brand range of consumer products plsu with little or no emphasis on circulation product.

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Convenience retail

Nice Moshi Monsters promotion

magsmoshimonstersCheck out where you have the latest Moshi Monsters magazine placed in your newsagency. The free toast stamp with this issue makes it easier for driving impulse purchases. We have it with kids magazines and at kid height at the counter. This gift makes it easy.

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magazines

Are supermarkets carrying more plush?

colesplushIs it just me or are the major supermarkets ranging more plush in-store. I appreciate they carry more plush at seasonal times like Easter but it does feel like they have more everyday. Their prices are high for poor-quality product – nothing new there though. If only consumers would realise.

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Plush

Simple name change makes newsagency shopper loyalty offer more relevant

bonusbucksA simple change can make a good idea better.  Check this out – a newsagent started using the Discount Vouchers facility I have written about here before but theirs BONUS BUCKS.

This is a clever move, one that speaks in more clearly to the customer. The customer can see that they are being given a bonus and that the bonus is bucks … $$$. I reckon that is more meaningful than DISCOUNT VOUCHER.

I’ll try a couple of different names for myself – it’s easy to change on the voucher – and find out what works best with my customers, what they understand more quickly and therefore can engage with more easily.

Seeing the voucher labelled BONUS BUCKS was a reminder of the importance of speaking to our customers in a way they understand, a way that is more likely to guide their engagement. The more we can do this without having to explain what we want them to do the better.

If you think about it, the big retailers we compete with spend considerably explaining their loyalty offer or other promotions. We don;t have the luxury of the big business level of advertising spend. We have to achieve cut through via our actions and processes. hence the importance of what we can something like our discount vouchers.

If you are using discount vouchers or something like it, think about calling it something else. Your software should handle the change easily.

On the use of discount vouchers themselves, we are now a year in and I am prepared to say that in 18 years of owning newsagencies, this is the most financially successful loyalty marketing I have ever seen. Any newsagent can run it.

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marketing

The late Valentine’s Day shopper

valentineslateI love the late Valentine’s Day shopper for their purchases as much as their story. But you can’t ask the story so you have to hope they tell you. One guy yesterday said he didn’t expect a card as he’d only been going out with the girl for a few weeks. He bought the biggest card he could, because size of card compensates, and was working on his story. Every day we get to be part of different stories. It’s fun.

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Greeting Cards

Since drones are in the news

magshowitworksdroneWe are promoting How It Works to leverage recent news reports about drone use overseas and possible use in Australia. Growing magazine sales of these special interest / fringe titles is achieved by being obsessively opportunistic. It works – drives incremental purchases – more often than it doesn’t

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magazines

Newsagents benefit from extra margin for The Saturday Paper

IPS has been promoting The Saturday Paper to newsagents in advance of the launch in a couple of weeks. They are reminding newsagents that our commission will be 27%:

The much-anticipated launch issue of The Saturday Paper – Australia’s first new national newspaper in forty years – is out March 1.

From the publisher of the Monthly and Quarterly Essay, The Saturday Paper will publish long-form journalism each week on the country’s most important issues. It will be distributed into New South Wales, Victoria and the ACT through newsagents and home delivery, and will not be available in supermarkets. Published 48 times a year, the paper will earn newsagents a 27% commission on sales.

The addition of a new weekly independent voice is a significant event in Australia’s news media. The Saturday Paper is expected to attract back to the market customers who drifted away from buying weekend newspapers, as well as to become another regular purchase of existing customers.

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Newspapers

Sunday newsagency marketing tip: what are you doing today?

Success in retail is more about the many small steps you take to promote, grow and manage your business, the one percenters some call them. I’m a firm believe in this for newsagency businesses today.

There is no big thing, no single bold step, no one product or product range that will save, define or grow your newsagency.

The future of every newsagency relies on many small steps, some interconnected, some stand alone. I am talking here about hundreds and thousands of small steps. This leads into my marketing tip for today: what are you doing today? What small step are you taking today to market or promote your newsagency.

Here are some examples of small steps you could take today: create a new window display, move a department or category of products to a new location, change the products at your counter, print a small flyer to be given to every shopper with an offer for a product you want to move, put signs on your car and part it a few streets away, reach out to another business you have not connected with before, reach out to a community group you have not connected with before, spend an hour you would not usually spend on the shop floor helping customers, relieve a staff member stationed at the counter and give them freedom to change something on the shop floor while you serve at the counter for them.

While these steps may seem tiny, they represent the types of steps necessary to make an overall small-step strategy to work and help a business grow.

The idea is that every day you do something, every day – yes, EVERY DAY – you take a step, no matter how small.

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marketing

Sunday newsagency management tip: being direct is the best approach

While being direct in your communication with someone can lead to them thinking you are offensive, it is the best way to communicate your concerns. In the long term, being direct pays off.

Many years ago I had an employee who had shocking body odour. Subtle approaches did not work. A direct approach about their smell resulted in the problem being resolved. They stayed on for years and we had a good relationship. This was a win for being direct.

More recently, I had another employee with an odour problem – not this is not something I seek in hiring people! – and I approached them believing, by then, that direct was better.  I wasn’t rude, at least I didn’t think I was. I explained that after a couple of hours work they started to smell and it was being noticed by co-workers and had been noticed by customers. They resigned a few days after I spoke with them.

Some topics are challenging to approach directly but that should not stop us. Being direct is not about being rude, it is about communicating your concerns clearly and directly, proving all the information necessary for them to act on what concerns you. The alternative is a meandering indirect route and that can end you up somewhere you do not want to be.

A spade is a spade is a terrific figure of speech, it reflects how we should communicate in business.

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Management tip

Thorntons chocolates in Australia?

chorthorntonsI must have missed the arrival in Australia of the Thorntons chocolate range. Thorntons is a strong UK brand with stand-alone stores – 296 shops and 186 franchises – and a good presence in a range of other retail businesses. The photo is a Thorntons product I noticed in a Coles supermarket, as part of their Easter range. We are seeing a surge in UK brands and retailers arriving in Australia and this leads me to wonder if Thorntons will open here. Thorntons products I have tried in the UK were excellent.

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confectionary

Strong start to Sydney gift fairs

giftfair2014I was at the Home & Giving Fair in Sydney yesterday, one of three excellent trade shows for retailers in the gift and homewares space. There was plenty of excellent product for the traditional newsagency shopper as well as excellent product to use to attract new traffic. The mix of retailers at the fair indicates how blurred the lines between retail niches has become: jewellers, card shops, gift shops, homewares shops, jewellers, garden centres, department stores, convenience stores and newsagents. Everyone is looking for products for their business as it is defined today. Some were looking for products through which they can diversify. That’s what I was looking for. The Home and Giving Fair is usually seen as the poor cousin to the Reed Gift Fair. I was certainly impressed with opportunities I saw yesterday.

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Gifts

What is the ANF connection to Crimvid?

anf-commercialSeveral newsagents forwarded to me an email from the ANF yesterday promoting a security product called Crimvid. They were surprised that the ANF is promoting this product.

If I was an ANF member and had received the email my first response would be why is the ANF promoting this product? What is in it for them? There is no disclosure of s commercial relationship between the ANF and the promoters of Crimvid. Given the endorsement of Crimvid by the ANF the organisation needs to be clear about why – otherwise members could distrust the endorsement.

As an association serving its members, the ANF would / should have done due diligence into Crimvid before endorsing it. The ANF communication offers no disclosure as to due diligence.

Some involved with the ANF will say that this blog post is an attack on them. It is not. It is pointing out that their communication endorsing and promoting Crimvid is incomplete: tell your members why you are endorsing it, share with them your due diligence insights as to why this is good for newsagents.

The ANF communication includes:

We often talk about a reason  for customers to step into a newsagency, our point of difference and our unique selling proposition.

If the ANF is suggesting that a single product is a USP then they are mistaken. A USP is something deep within the business, something long term around which to build a business plan. It is not a single product.

Instead of mis-using catchphrases of others, the ANF communication should have clearly demonstrated the relevance of this product to a retail newsagency business so that newsagents could continuer it in the context of their businesses and what they do today.

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Newsagency challenges

Promoting Daphne’s Diary magazine

magsdaphnesdiaryWe are promoting Daphne’s Diary magazine – a publication in the form of a diary.  It appeals to an important demographic for us. Sourced through Gotch, this is a challenging magazine to place – challenging in a good way. We have it next to home and living titles and near Frankie. The Daphne’s Diary website provides a good insight into their target customer.

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magazines

Oversupply of AWW cookbooks

aww-oversupplyHere is another example of Bauer sending our magazine stock unnecessarily. We received more copies of monday to friday diet when we still had plenty of stock of the first issue of this title. This is not sales based replenishment – no, it’s an abuse of the newsagency magazine supply model. We early returned the extra stock.

11 likes
magazines

Damaged re-issued magazine stock frustrating

magazines-damagedSome stock of the reissued part 1 of Precious Rocks Gems & Minerals was damaged and had another retailers sticker – on barcode stock that was not removable. Very frustrating!  retailers should use removable stickers. Distributors should only send merchantable stock – instead of us having to return stock we can’t sell.

7 likes
magazines
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