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Incomplete story about newsagents in The Australian

The Australian yesterday ran a story about newsagents yesterday: Signs of hope after agents battered by print fallout. Written as a puff piece to promote Hubbed Connect, I say it is incomplete for these reasons:

  1. The headline: Signs of hope… yes, there are signs of hope but not because of a bill payment service but because smart newsagents are thinking and acting as retailers and not as agents.
  2. Plenty of newsagents love newspaper home delivery and don’t see it as thankless. They see the News Corp. controlled fees as thankless. Portraying it as that only serves the purpose of the article.
  3. News Corp. itself has played a key role in the state of newsagency businesses in Australia: For decades it has forced newsagents to deliver newspapers for a fraction of the real cost of providing the service; for many years it held the cover price of its products down, causing newsagents to make less each year in real terms; News controlled who became newsagents yet it did not use this control to build a strong and viable channel.
  4. Not all retail newsagents sell lottery products. I would guess that around a third of all retail newsagents don’t have lotteries. This is important since the article says ANF data show 30% of newsagency traffic comes from lottery product sales. I don’t have lotteries in any of my businesses and I’m not complaining at all.
  5. The article says the last year has been the toughest for newsagents yet there is no explanation of how this conclusion was reached. I know of plenty of newsagents how increased sales last year by being entrepreneurial. Such balance is not included because it does not serve the purpose of the article.
  6. The number of delivery only newsagents is wrong. A quick check with News circulation people could have confirmed that.
  7. The article quotes an ANF representative saying Connect is a game-changer for newsagents. The article should have tested this, interviewed newsagents who have already implemented their own game-changer strategies. It should has asked how it is a game-changer beyond pitching to newsagents in 2013 something Australia Post has had for many years and offers today in a retail format far more advanced than what is being proposed to newsagents.
  8. There is no disclosure of the ANF having a shareholding in the Hubbedd Connect platform promoted in the article.
  9. There is no disclosure that Matt hand bury is a relative of Rupert Murdoch, CEO of the company that published The Australian.
  10. In February 2012 I wrote that News Corp. was in crisis in relation to newspaper home delivery. The company denied it was in crisis in a range of public forums yet it did not challenge the evidence of considerable newsagency closures. The company since responded with new terms for newsagents and by this action indicating that it was in part a cause of the crisis.

There are many newsagents who have successfully reinvented their businesses, newsagents achieving growth in shopper traffic and growth in revenue on the back of their own entrepreneurial efforts. Why does The Australian not cover that?

Yes, retail is tough and being a newsagent is hard work. This article in The Australian is written to serve a commercial purpose and for that reason it is incomplete and inaccurate.

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Hubbed

Poor information from Tatts barcode changes

Tatts started rolling our barcodes per product over the last couple of days and failed to advise those who help newsagents deal with such technology changes.

For a company that spends considerable sums on rating the customer service newsagents provide this barcode roll out is poor form. The company will see consider this blog post to be unfair criticism. Hey, I did not decide on the barcode change and neglect to properly inform stakeholders. Tatts people need to judge their actions to the standard they judge their retailers.

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Customer Service

Another example of Puzzler magazine oversupply by Network Services

Click on the image for supply and return detail to see for yourself the supply and return data for Puzzler Simply Code Crackers and tell me if you think I am wrong to complain about oversupply of this title by Network Services in one of my newsagencies.

Issue 1/5/13: Supply 5, returned 1.  5/6/13: 6/1. 3/7/13: 6/5. 1/8/13: 7/5. 29/8/13: 9/9. 26/9: 10.

The magazine allocations experts at Network have been increasing my supply without justification.

Talk any supplier to newsagents and they will tell newsagents don’t respond to emails and rarely engage with opportunities. They will tell you newsagents are time poor. One reason newsagents are time poor is because they have to deal with a magazine distribution model that burdens them in out of data business practices and because they have to spend time chasing errors that bleed them of cash in addition to time – like this creeping oversupply of Puzzler Simply Code Crackers.

Newsagents strike out at all magazines because of the oversupply of some.

When the pick over the caracas of this world, an anthropologist will discover that the magazine opportunity in our channel was killed off by very few behaving selfishly while those who should have been concerned sat on the sidelines, on their hands.

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Magazine oversupply

Halloween is not Halloween without a coffin

The coffin arrived and is now in place as the centrepiece of our Halloween 2013 display. Sadly, like all Halloween centrepieces, it will probably sell early.

We’re making the most of the opportunity and showing others in the centre how to do Halloween – we;re expecting their displays this year to be like last, very vanilla (boring).

Sales continue to be excellent – up on 2012.

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Fun

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.

16 likes
Lotteries
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