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

Onesies show up the innovative newsagents

Onesies have featured on Facebook and Pinterest this week with office pyjama days raising money for charity and last night on TV with them being worn on the Living Room show on Network Ten.

Newsagents who have had onesies in stock leading up to and during Winter need to be congratulated – you;’re the early adopters. Newsagents reading this and thinking whether they should get into this popular and good-margin fad need to spend more time thinking about what you could sell by being an early adopter.

Whereas in the past what was sold under the shingle of Newsagency was defined and rarely varied from, today’s retail landscape and the challenges newsagents face mean that what we can sell is only limited by our imagination. Onesies are a perfect example of this. I know of newsagents who did several thousand dollars in sales before Winter got going. Well done to them!

The onesies phenomenon is an excellent example of the diversity of ‘gifts’ we can sell.

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Gifts

The ATO continues to do nothing to address appalling treatment of newsagents

The questions from customers about the tax packs keep coming and we keep answering them and the ATO does nothing but talk. While many newsagents have written to their members of parliament and the issue has received considerable media attention, nothing has been done. Newsagents continue to provide a valuable public service for free.

As I wrote two weeks ago, this move by the ATO is, in my view, a breach of their charter. That they continue to ignore newsagents at the coal-face is evidence of how out of touch the ATO is with the real world. Shame on them.

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Ethics

Moderate interest in the royal baby magazines

We saw a sales bump for the royal baby special editions of magazines in my newsagencies. No mad rush, just a bump. hence my labelling interest moderate.

As the photo shows, in one of my stores we promoted several of the magazines with newspapers – as well as their usual location.

In another of my newsagencies we promoted the magazines on the lease line, facing into the mall, to generate traffic. We got a bit of that but they sold equally well from the usual location for the weeklies.

If I had to call it after a day I’d say Who is benefiting the most. Certainly that is what I am seeing in my businesses.

There seems to have been a blip with OK! supply. We did not get the full allocation making co-location challenging.

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magazines

21st Century Australia party uses newsagents to distribute election propaganda in the form of a ‘magazine’

Yesterday some newsagents received 21st Century Australia from magazine distributor Gordon & Gotch. Retail price is $9.95 and the on sale period is around three months.

21st Century Australia is not a magazine. It’s election propaganda from a political party: 21st Century Australia. Go to their website and see for yourself.

Indeed, go to their website and download the whole magazine for free. Seriously.

The leader of the 21st Century Australia Party is Jamie McIntyre. He calls himself an educator, author and mentor.  Reading through the website he comes across to me as someone peddling a familiar rags to riches story. There is little in the way of substance. From what I can see, his businesses don’t appear to create real value or engagement for those connected with them.  Maybe my suspicions are on alert because he has Max Markson as his publicist.

If he uses people the way newsagents are being used for this ‘magazine’ no wonder he’s done okay for himself.

Check out the report by Mark Hawthorne in The Age about an allegation that Jamie McIntyre is faking Twitter follower numbers. Also check out The Sydney Morning Herald report from 2011 and issues with ASIC. While you’re researching him you might want to check out this.

This ‘magazine’, 21st Century Australia, should never have been sent to newsagents. It’s not a magazine. Someone in Gotch should have stopped it getting on the trucks. If not for the election propaganda nature of the content then for the design. It’s dreadful.

Our glorious magazine distribution model is such that we have to pay to send this junk back. Gotch has declared it a full copy return. So even if newsagents early return this title they have to pay freight as well as the labour handling costs.

This is another example of what’s wrong with the newsagent magazine distribution model. We get sent this junk and have to pay ourselves to handle it. None of our magazine competitors get this junk. It makes us less competitive. It’s this stuff that is driving more newsagents to shrink engagement with magazines and some to exit the category altogether.

The magazine distributors say the sale or return model protects newsagents. This is nonsense. Labour, freight and storage costs for junk like this ‘magazine’ are a cost of business newsagents face that our major competitor magazine retailers do not face.

Gordon & Gotch has ethical social responsibilities to newsagents, responsibilities they have failed to fulfil with the distribution of 21st Century Australia.

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Ethics

Travel agents hit back at US Woman’s Day magazine

The response to 9 Things Travel Agents Won’t Tell You in the US Woman’s Day magazine has been ferocious in social media. Twitter and Facebook are alight with travel agents striking back at the magazine, seeking to hurt it commercially for an article they claim will commercially hurt them.

Not only do publishers have to create a sustainable model in a mobile and digitally enabled world, they need to be able to handle the fast assembling of a crowd baying for blood of what they publish.

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Media disruption

Good gift but no help with magazine sales

The free bamboo kitchen utensil with the latest issue of Cook Vegetarian is good value in my view but it’s done nothing for sales. We’ve had the full cover on show at eye level – showing off the gift. We’ve seen no uplift. We’re in gift with a magazine season right now with plenty of titles bagged with gifts from umbrellas to cosmetics to beanies. While I get that the gifts usually help drive sales, flooding the market all at once does make shoppers a bit gift-shy, it takes away the specialness of the gifts.

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magazines

Come on magazine publishers where’s your support for newsagents?

Both Bauer and Pacific have been using social media to promote their special issues out early with coverage of the royal baby. Their engagement was a perfect opportunity to remind shoppers to pick up the magazine at their local newsagency. I’ve not seen them do this.  Why should they promote us? … because they say we are important and because we will do more to support these issues than supermarkets, petrol outlets and convenience stores. They only do extra when they are paid extra to do it.

Newsagents sell more magazines than all other retail channels combined.

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magazines

Updating the royal baby poster

With the announcement of a name for the royal baby we updated the poster. We were tempted to go with boy george in the headline but baby worked better.

Early indications are that interest will be strong. My feeling, however, is that interest will fade faster than it would have for this content five or ten years ago. That’s the nature of the market today for short shelf-life news.

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magazines

Promoting Friday’s royal baby special issues

We have an A3 poster out promoting the special issues of magazines out tomorrow with royal baby coverage.

We’re currently the only magazine outlet in the shopping centre promoting this. The supermarkets won’t. To me it’s a good way to promote a point of difference – by giving shoppers a heads up and doing it with a professional looking poster.

This promotion is about our newsagency more than about individual mastheads.

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magazines

Is the Tatts training requirement turning people off buying a newsagency?

I’ve had three calls from newsagents in the last ten days saying the sale of their business is at risk because of the Tatts requirement that all directors of a purchasor attend the full Tatts training requirements. In one case I’m told a director has been told they need to return from overseas to do the training even though they will never work in the business. In their case they now appear unlikely to proceed with the purchase of the business.

While I understand the importance of proper training, the tatts approach appears to be heavy handed. I am certain I could find some excellent lottery products sales people in newsagencies who have never undertaken any training. It’s all about the person, their retail skills and their motivation.

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Lotteries

Royal baby magazine on-sale changes okay in my view

While it is funny going back to three magazine deliveries this week, I don’t see it being that disruptive in that those of us getting magazines on Friday won’t have to label them. The biggest challenge I can see will be for newsagents with sub agents.  The sales opportunity is what I’m more interested in. I am keen to see what this baby can do for us. This is why we will be going out hard in my newsagencies.

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magazine distribution

Sales of The Block slow

Our sales for The Block one-stot are slower this year than last yet our promotion has been as engaged. We’ve had the title at the front of the store facing into the mall, with home improvement titles and next to newspapers. With the show still on air we continue to support the magazine but are preparing to withdraw and use the space for other titles.

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magazines

Great TVC from Stihl

Check out the latest TV commercial from respected powertools brand Stihl. Watch the whole ad and hear them say their products are not available at Bunnings and Masters.  It’s great to hear a respected brand say they don;t deal with these retailers who focus on cheap products.

I’d love some of our suppliers to promote that their products are not in mass merchants who disrespect them.

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Social responsibility

Kudos for News Limited

I called on News Limited to help address a supply issue and they responded quickly and professionally. Their help has been excellent because they want what we want – more sales.  I mention it here to publicly praise the circulation team at the Herald and Weekly Times. As a retail newsagent it’s terrific they respond to our calls for help.

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Newspapers

Time to look at the compensation model for Melbourne Wedding & Bride

The latest issue of Melbourne Wedding & Bride is the thickest I can recall. The photo shows the magazine with a copy of Better Homes & Gardens behind it.  This shows that in the space Wedding & Bride takes I could fit five or six copies of Better Homes & Gardens.

The size of Melbourne Wedding & Bride imposes handling and merchandising costs for newsagents that are greater than we have for the average magazine. It’s for this reason that I think we need to have a commercial discussion with the publisher about compensation.  A magazine distributor reasonably representing its retail partners would have already done this.

Melbourne Wedding & Bride is packed with advertising. I’d expect ad rates to have increased over the years, to certainly cover the cost of the larger publication. The fixed cover price and low gross profit of 25% leaves us worse off with the larger magazine today.

I’d like to see a size trigger set for magazines. Titles thicker than a centimetre, for example, should have a retailer surcharge that is fully passed on to newsagents. While not wanting to complicate things, I’d like the surcharge to apply based on time on the shelf to more accurately compensate the retailer for engaging their assets.  This would be reasonably easy to organise.

I like Melbourne Wedding & Bride, it’s a good magazine that sells well over the on-sale period. That it is in a size category of its own is what puts it on my radar today.

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magazines

Ready for the royal baby bump

The Australian Women’s Weekly is the first Australian magazine I’ve heard of announcing a response to the royal baby news. They will have a special wrap-around for the next issue, on sale next week. It will be interesting to see what we get Thursday.

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magazines

Darrell Lea Dad’s Bags to be an Australia Post catalogue promotion

Last year when newsagents were encouraged to order Darrell Lea Dad’s Bags for sale in the lead up to Father’s Day this year they were told Australia Post would have the products including in corporate stores. What they were not told is that Australia Post would promote the Dad’s Bags on the front cover of their August  catalogue.

I am certain there are newsagents will be shocked to discover the government is competing with them for what is an important retail season.

Why is this government protected post office monopoly selling Darrell Lea confectionery products including the Dad’s Bags? These are post shops. They should be selling stamps and packaging specifically for posting. That’s what they exist for.  Darrell Lea products are outside the scope of what is allowed in the Act under which Australia Post operates in my view.

Every Dad’s Bag sold in a government owned post office is one less sale for a nearby small business newsagent. It would also be one more attack on small business by politicians of all sides who prefer to protect Australia Post than deliver on their claimed support for small business and competition.

Shame of Darrell Lea for dealing with the government owned monopoly. Shame on every politician who supports Australia Post competing with newsagents and other retailers through their corporate stores.

I’d like to see Australia Post corporate stores more tightly controlled in what they can sell – no cards, gifts, picnic sets, sewing machines, books, stationery or Darrell Lea

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confectionary

Queensland State Government outsources Learn to Drive book distribution to US giant

In another show of support by a government for Australian businesses, the State Government in Queensland has contracted US giant Staples to distribute the state’s learn to drive log book and keys to driving in Queensland. Queensland newsagents now have to buy from Staples thanks to the state government.

GNS offers a perfect distribution channel for both publications given that newsagents are the go to retailers for these. GNS is Australian owned.

Politicians making these decisions to give US companies ahead of Australian businesses need to be held to account. Even if using an Australian business costs a little more the economic benefit is greater for the country and the state if they appoint an Australian supplier. Sadly they will not realise the damage until its too late.

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Social responsibility

More Forever Clover product

Further to my piece on Forever Clover last week, we sourced these tins that go with the cards. The result is a Forever Clover will spend more with us.

I note that the Forever Clover cards now come with a sticker labelling them: footy cards for girls. Smart move!

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magazines

An increase in bagged comics?

It feels to me like there has been an increase in supply of bagged comics, especially packs at the high end – like this Simpsons pack at a whopping $18.95.  The price point is excessive for what shoppers expect to pay in a newsagency and it’s also excessive for this product.

I’d be interested to hear from other newsagents abut whether they feel supply of these types of products has increased for them.

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magazines

Newsagents being pursued to sign up for new Hubbed connect service

Several newsagents have told me they have been contacted many times by their association encouraging them to consider the new Hubbed service.  An email I received from NANA on July 9 reads as an endorsement of Hubbed by the ANF and NANA:

NANA and the ANF would like to invite members to attend one of our information sessions we will be holding at our QLD office in Zillmere.

These sessions will provide you with the opportunity to learn all about the new CONNECT system which is now being offered to member Newsagents nationwide.

This is a fantastic opportunity for newsagents to see how they could grow their businesses and revolutionise the way that consumers transact in retail environments.

We have shipped a Hubbed CONNECT machine for you to touch, feel and experience.

The email included:

There has been a great deal of interest from members in the Hubbed “CONNECT” system for newsagents and the exciting news is that this great opportunity will roll out in QLD starting in August 2013.

As I noted, this email reads as an endorsement. That the information sessions are being held at association offices also suggests endorsement.

Here are questions I’d want answered before contemplating Hubbed further:

  1. What is the nature of the relationship between Hubbed and any of the newsagent associations or anyone connected with the associations?
  2. Specifically, is there any money or other benefit whatsoever flowing from Hubbed to any of the associations and if so on what basis?
  3. What due diligence has been undertaken on the Hubbed business model?
  4. What due diligence has been undertaken on the proposed Hubbed contracts?
  5. Have all the claims made by and about Hubbed to newsagents been investigated?
  6. Is the ANF, NANA, QNF or any other association endorsing Hubbed and if so why and if not why?
  7. Has the ANF, QNF, NANA or any association promoting these sessions considered what of the Hubbed services are already available in newsagencies?

I was recently at the Tasmanian Newsagent of the Year Awards dinner in my capacity as owner of Tower Systems to present the Retail Newsagent of the Year Award. As an award presented I was given a few minutes too speak at the dinner. I took this to mean two or three minutes. That’s all I and all bar one other award presenter took. The CEO of Hubbed took twenty minutes and launched into a sales pitch. While it was the wrong place and wrong time for this, it gave me an insight into their services.

From what I can tell Hubbed is not offering anything significantly different to what newsagents have FREE access to today through ePay and Touch Networks. My understanding is that Hubbed will cost newsagents $7 a day or $17 a day depending on the level of service they choose. That’s a lot of money compared to the free services available already.

It could be that I am missing something but I don’t see Hubbed as generating considerable new traffic. It’s an agency service and newsagents make money by providing services at the counter. Retail is moving away from the counter. Newsagents, in today’s retail environment, can make more money on the shop floor by being engaged retailers.

Investing $2,500 (less than $7 a day) in stock of new product lines, a newsagent could expect to make at least $7,500 gross profit over a year based on average stock turn and margin. They would have established their business as a destination business in a new product category and that should see at least some customers returning for additional purchases. Some of the new traffic should also generate revenue from other parts of the newsagency.

My focus on the future is on generating new traffic from new product categories, non agency, non commission product categories. I’m confident I will make more money by exerting control over what I choose to sell and the price I choose to sell it at. Check out the Newsagency of the Future video for more of my thoughts on this.

I don’t know enough about Hubbed to tell newsagents what to do nor is it my place. I have written this post to raise questions, to ensure that newsagents considering signing up for Hubbed are fully informed, more informed than covered in communication from the associations.

Newsagent associations have no place being involved in providing or endorsing any commercial services. They ought to focus 100% on policy and get that right.

Every time an association endorses or promotes in any way a business it has any commercial relationship with it should disclose the interest.

The last service the ANF wholeheartedly endorsed and promoted was Bill Express, in 2003. As newsagents later discovered, the only due diligence undertaken by the ANF  related to advice from their lawyers about ANF Director matters and not Bill Express or the Bill Express related contracts. Newsagents lost millions of dollars.

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Newsagency challenges
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