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

Magazines under the spotlight on TV

Newsagents should watch the video story produced by The Australian Financial Review on magazines. It looks at educating advertisers about readership versus sales and tracks some of the factors driving sales down.

I’d like to have seen the story cover more areas that I think are playing into sales challenges: too much range in some areas (too many imported titles), poor content and a supply model that disadvantages newsagents over other magazine retailers. I’d also like to have seen more publishers represented.

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magazines

Oversupplied with Puzzler crossword titles

We were grossly oversupplied with a bunch of new small-format Puzzler branded titles last week. Not only did we get a bunch of new titles we did not need to satisfy shopper interest in puzzles but we got way too many. Ten copies of a new title is too many.

Crossword and puzzle magazine publishers using Network Services should be asking why Network did this. from where I sit this action can only dilute attention for existing puzzle and crossword titles. For example, what do Lovatts think about this – a bunch of new titles competing directly with their mini books and distributed by the same company.

We’re short on room so on the weekend I decided to early return the new Puzzler titles. A better approach would have been for Network to give newsagents control over whether they took on these titles and if they did, the volume they desired.

This is a good example of the broken magazine distribution model in Australia that magazine publishers and distributors enable.

Footnote: occasionally when I write a post about the magazine distribution model I think why bother? Nothing changes right? The thing that keeps me chronicling just some of what newsagents have to put up with is that one day someone who can drive genuine change will realise the harm done by a few to what should be the most important route to market for Australian magazine publishers.

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magazine distribution

Brands key to driving new traffic

We have a spinner packed with Peppa Pig product on our lease line as I have noted here previously. On Saturday I saw the importance of this stand in attracting shoppers to the business who might otherwise not have shopped with us.

Standing outside the newsagency I watched as a young girl dragged mum, dad and an older sister to look at Peppa. She pointed to the sign on top of the spinner. She bought a Peppa and the older sister bought another plush item. The parents bought two greeting cards.

Sometimes we don’t need a big billboard display to attract shoppers. Sometimes, easy to see well-located placement of a recognisable brand can attract traffic that otherwise you may not have attracted.

Footnote: our discount vouchers helped us maximise the opportunity from this family. Total spend was in excess of $35. The team working in this newsagency created this success for us.

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Brand retailing

Chasing extra partworks sales

We’ve been promoting the latest part in the Great Bakes partwork series with TV Week since this title appeals to those who watch the baking shows on TV. It’s all about putting product where the shopper most likely to be interested will stumble across it.

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magazines

Sunday newsagency management tip: remove people who don’t support your plans

If you have people working in your newsagency who disagree with the direction of the business and or changes you are making then you need to act. Either they wholeheartedly support your moves or they go. Having people remain working for you when they disagree with what you are doing can harm the business and distract from the changes you want made.

It’s one thing to have a robust debate about changes you may make and another entirely to face disruptive challenges to every move you make.

I was talking to a relatively new newsagent this week (they’re six months in) about the challenges of a long-term employee of the business who questions almost every move they make, complains about them behind their back and even undoes changes on the weekend if the owners are away. I told them to issue a written warning to the full-time employee with a view to termination if their behaviour does not change.

The employee in this business was being passive-agressive to the new owner and exerting more control over the business than they should. Given that the business has less that 15 employees the owner has options for a faster resolution of what is a toxic situation.

Newsagents need to act as the owners they are. They need to lead the business and run it from a position of authority.

While I welcome debate about change in any business I own, once a decision is made I expect 100% support from all team members.

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Management tip

Promoting Bathurst magazines

We’re promoting Bathurst magazines between newsagents as well as their usual location. Many people whole will buy Bathurst titles are not likely to go looking for them – hence our placement to drive impulse purchases. Every extra sale counts.

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magazines

Paying people on time

The story this week about an error in payroll processing at Bauer that saw some employees paid late is a timely reminder about the importance of processes for paying people: same day, same time, with a properly documented payslip showing full details and the ability to reprint any information at any time. No cash in hand payments.

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Newsagency management

October 1998: newsagents call time on magazine oversupply

STOP MAGAZINE OVERSUPPLY is the headline stripped across the cover of the October 1998 edition of National Newsagent magazine. Inside, the magazine has a series of reports about the challenges of magazine supply encountered by newsagents and what various stakeholders think about this. Plenty reporting on the problems, some suggested solutions but – as time has shown, no resolution.

One thing that struck me re-reading the magazine is the number of supplier representatives we have dealt with over the years who have joined our channel, looked at magazine distribution and said it’s not fair and that they would do everything possible to resolve this. Then they move on.

The head of Network Distribution Company at the time, Godron Toft, is quoted as calling for a minimum 50% sell through for magazines. He said Network already achieved that figure. Toft was probably right overall but certainly wrong on a title by title basis, especially if you took out ACP titles from the network pool. Toft’s call and claim are a good example of data being manipulated to serve suppliers and not newsagents.

Newsagents today are responding to magazine oversupply by cutting magazine display space. While this can fix parts of the problem, it does not necessarily feed into long-term business plans for a newsagency of the future. My view is that a reasonable magazine range is important to attracting a viable mix and number of customers to a newsagency.

I came across this issue of National Newsagent yesterday when culling some old papers. It’s not the only material from fifteen and more years ago about magazine distribution to newsagencies.

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magazine distribution

ANF survey results rank achieving equitable magazine supply as the most important newsagency channel issue

144 people participated in my Newsagents and the ANF survey. Equitable magazine supply is what people want the ANF engaged in the most while A bill payment platform is what people want the least. These responses are not unexpected.

I am not surprised that the majority want the ANF engaged in Lobbying politicians – something the organisation has done consistently and effectively for years now.

I am surprised by the disinterest in Western Union, A parcel pickup/drop off service and in the ANF Running newsagent industry awards.

Anyone representing newsagents in any role, be it in an newsagent association or some other service organisation, ought to consider these results when planning their activity.

Note: the graph shows the average ranking achieved. The higher the ranking the less interested the responders are in the ANF engaging in this activity.

Anyone wanting a file of all survey responses should email me. The data does not identify individuals so there is no break of privacy. I make this data offer because too often headline results of surveys are used with little transparency of all voting. I will share all voting with anyone who wants it.

Click on the image for a larger version.

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Newsagency challenges

ANF responds to questions on Hubbed

Adam Joy, COO of the ANF, has responded to an email I sent him about correspondence relating to Hubbed he sent to a newsagent re Hubbed. In that correspondence Adam inferred that I was on the ANF board when to chose to go with Bill Express. I was not on the board then. I emailed Adam inviting him to revise what he had written. I also asked some questions about Hubbed.

Click here to see a response from the ANF to questions and my complaint about their letter to a newsagent.  I’ll post my original email to Adam as a comment to this post.

Here is the response I sent yesterday to Adam’s letter. This response needs to be read in-conjunction with Adam’s letter.

Adam,

Thanks for responding to my email.

You have inferred that I was on the ANF Board when the Bill Express decision was made. I was not. In fact, I joined months later. You need to advise who you have put about this mis-representation to.

In your letter you refer very selectively to the minutes of several ANF Board Meetings where Bill Express was discussed and use to build a narrative supporting your apparent claim that I supported Bill Express. The minutes in my year on the board were an inadequate representation of three days of meetings. Also, these minutes do not cover Executive Meeting discussions and other discussions. My position on Bill Express then and now is on the public record – a record which is counter to the narrative you have sought to pitch. You need to withdraw what you have written.

Now I will turn to the questions I raised and your response. For ease of comparison I will use the same numbering but not repeat my question or your response.

  1. I see no evidence of what I would call reasonable due diligence in your answer. You should have financial models at the core of this so newsagents can see the full costs and full opportunities. Your response does not indicate a rigorous process.
  2. The only business plan that matters to newsagents is their business plan. I would have expected the ANF to create business plans for each Hubbed offer so newsagents can see how it can play out.
  3. You say you have conducted retailed research on bill payment yet you have not published this. It would be useful to the ANF case that you publish this along with details of the newsagents you have worked with over the last six months on this issue. If your process is sound then the evidence will boost newsagent confidence.
  4. The ANF should have this information. You suggest its similar to a Point of Sale provider. No, it is not similar. Here, the ANF is a promoter. The obligation on the ANF is considerable yet to fails so far to step up. In terms of Point of Sale, each item in a package – which can be leased through any bank, finance company or other party – can be priced back to the individual item. With Hubbed this is not the case for some of the items. This is core due diligence the ANF ought to have undertaken for newsagents.
  5. I am told that newsagents querying what happens to Hubbed Premium hardware if they decide to not continue then Hubbed will find another location. I would have expected the ANF to require this to be covered in the contract and further that the lease for the equipment and the Hubbed business itself are one in the same.
  6. Yes there appear to be three different agreements. My view is that there should be one agreement so as to avoid a core issue with the Bill Express model. Further, I would have expected that thorough due diligence would have required that this be the case.
  7. Thanks for the response but I would have liked to see more detail.
  8. I am not challenging the integrity of anyone, just asking a question that needs to be asked. Attacking the question is unhelpful as it detracts from your answer.
  9. I would gave expected the ANF to be paid for the considerable amount of marketing support provided in your various media platforms and the time invested by your staff in promoting Hubbed to newsagents. I am not involved in any company operating in the space occupied by Hubbed.
  10. I have seen no information provided to demonstrate experience from the people behind Hubbed in the launch and running of a start up business in the consumer-facing services business at the core of the Hubbed offer.

I am happy to discuss Hubbed face to face. A public forum would be appropriate to demonstrate transparency. If the Hubbed model is good as you say it is newsagents will see that and embrace it. Your responses to my questions do not provide the detail and comfort I was seeking.

The ANF and Hubbed appear to not like being asked questions or challenged. If the offer is genuinely good and if the ANF has undertaken thorough due diligence on behalf of its members thorough scrutiny ought to be welcomed and result of good member up-take.

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Hubbed

Bang! Halloween off to an excellent start

Halloween sales in the first day and a half we have the stock up have been excellent making us wonder if we have enough stock for the season of fun!

We have Halloween products on the lease line. This placement is bringing new traffic in for us. These shoppers buying on impulse get a discount voucher and are encouraged by this to buy more. Halloween is a perfect season for leveraging discount vouchers to drive a more valuable per-visit spend.

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Newsagency opportunities

Tatts iPhone App to challenge retail lottery sales

The Tatts iPhone, available free from iTunes, is set to facilitate lottery product sales that would otherwise have been completed in a newsagency or some other lottery outlet.

I downloaded the App to try it out. I was surprised they are transacting by location. I am guessing their various agreements require this.  OzLotteries has no such barrier – you can by from any web enabled device anywhere in the world. The barrier aside, the app makes purchasing easy – more convenient than walking or driving to the store for a ticket.

You can get more information on the Tatts app from the iTunes store.

Newsagents facing a Tatts corporate image fit need to consider the App and online moved by tatts and their partners when budgeting for the capital investment.  While the pressure from tatts is considerable re corporate image, there is an opportunity to make a case in an appropriate forum for capital investment that respects the further opening of channels outside the traditional retail channels used for lottery products in the past.

Blindly investing in a corporate image fit without crunching the numbers and considering these mobile and online moved could lead to a bad investment.

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Lotteries

Discounted crossword magazine titles

I was in Cairns yesterday and noticed this display if discounted crossword titles at the newsagency at the airport. This offer of Puzzler titles mirrors the Bauer discount magazine deals that are prevalent in transit newsagency locations.

While the publisher argument will be that selling on price gets shoppers buying more, I see it as the publisher not backing better content than competitor products and that they are out of ideas for improving the product.

I can understand a few cents difference in cover price but some of these bagged and bundled magazine deals are so steep they educate the shopper to not pay full price for these titres elsewhere and, I suggest, therefore not value these titles as they once would.

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magazines

Excellent book on shopper loyalty programs

I’ve just read Scoring Points by Clive Humby, Terry Hunt and Tim Phillips, the definitive book on retail shopper loyalty programs.  Scoring Points chronicles the introducation and finessing of the loyalty program at UK supermarket giant Tesco. I’d recommend this book to any retailer considering loyalty programs and how they might use them in their business. While written from the perspective of a big retailer, this book is just as relevant at our end of town.

While I must prefer the discount vouchers approach to loyalty, this book is about the broader shopper loyalty focus and how it’s vital every retailer play in this space.

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Newsagency management

Newsagency theft story timely

Newsagents ought to read the story from The Sydney Morning Herald yesterday about the newsagency employee caught stealing more than $400 a day.

While it’s good to read about a conviction my work with newsagents tells me that only a fraction of theft in newsagencies is detected. here’s a reminder of what I wrote on employee theft last year:

Management tip: How to reduce employee theft in your newsagency
Retailers too often struggle with cutting the cost of employee and customer theft. They ignore opportunities to block theft and turn their backs on understanding the cost in their business.

Here is best practice advice which, if followed, will reduce the cost of theft in any retail business.

  1. Establish a theft policy and stick to it.  See below.
  2. Check references of prospective employees.
  3. Ask candidates if they would agree to a background check.
  4. Only sell what you arrive, bring into the store, through Point of Sale software. If you track it you can know if it has been stolen or not. If you do not track it who knows if it is stolen. [Most often businesses I work with to resolve theft issues would have found it sooner had they been doing this.]
  5. Track ALL sales – by scanning, touch screen button or PLU (product look up code), a hot key on your computer screen.
  6. Stop all department sales, sales where the employee gets to enter the amount of the item.
  7. Scan out ALL returns, products which are returned to suppliers.
  8. Undertake regular spot stock take throughout the business. The discrepancy between what you have and what the system has reflects theft.
  9. Reorder stock using your retail management software. This stops poor buying decisions. It also identified stock theft and employee fraud around stock.
  10. Use employee initials, codes or bar codes against each sale. Yes, this adds time to each sale. The benefits far outweigh the time cost.
  11. Set an end of shift balance target of $5.00. Many retailers achieve this – it takes discipline.
  12. Change your system passwords regularly. Make it a condition of employment that these passwords are never shared.
  13. Do random, during the day, register balance checks. Check that the cash your computer system thinks should be in the cash drawer is what is actually in the cash drawer.
  14. Use your software to check and report on behavior which could indicate employee theft.
  15. Follow your suspicions regardless. Put your business ahead of friendships..

The cost to any retail business of customer and employee theft can be significantly reduced. The keys are retail owner and management engagement, full use of the software and relentless application of a zero tolerance approach.

Here is a suggested THEFT POLICY for employees to read and sign.

  1. Theft, any theft, is a crime against this business, its owners, employees and others who rely on us for their income.
  2. If you discover any evidence or have any suspicion of theft, please report it to the business owner or most senior manager possible immediately. Doing so could save a considerable cost to the business.
  3. We have a zero tolerance policy on theft. All claims will be reported to law enforcement authorities for their investigation.
  4. From time to time we have the business under discrete surveillance in an effort to reduce theft. This may mean that you are photographed or recorded in some other way. By working here you accept this as a condition of employment.
  5. New employees are to provide permission for a police check prior to commencement of employment.
  6. Cash is never to be left unattended outside the cash drawer or a safe within the business.
  7. Credit and banking card payments are not to be accepted unless the physical card is presented and all required processes are followed for processing these.
  8. Employees caught stealing with irrefutable evidence face immediate dismissal to the extent permitted by local labour laws.
  9. Employees are not permitted to remove inventory from the store without permission.
  10. Employees are not permitted to provide a refund to a customer without appropriate management permission.
  11. Employees are not permitted to complete their own sales.
  12. Every dollar stolen from the business by customers and or employees can cost us up to four dollars to recover. This is why vigilance on theft is mission critical for our retail store.

Take theft seriously.

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Newsagency management

Using tents to attract newsagency shoppers

We’re promoting tents at the front of the newsagency for the last week of the school holidays to pitch our shop to kids and people shopping with kids. This teepee is one of three designs we have accessed to broaden our range of kids gifts in the run up to Christmas.

We’re the only retailer with this range in our centre. We’re excited to see how it performs.

Making moves like this is important as we have to attract our more shopper traffic from our own efforts rather than relying on attracting shoppers with products available in other retailers nearby. What we place at the front of our newsagencies is vital to pulling people off the street or in from the mall. It’s up to us.

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Gifts
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