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

NANA and QNF respond for newsagents on unconscionable conduct

The federal government established an expert panel to consider issues arising out of the Government response to the Senate Economics Committee inquiry into unconscionable conduct.  The QNF and NANA made a submission to this panel.  Click here to see a copy of their submission.

In the submission, they list conduct which newsagents regularly experience.  This list will resonate with newsagents:

  • Refusal to collectively negotiate – which seriously disadvantages individual newsagents
  • Take it or leave it contracts.
  • ‘Lock in’ which prevents newsagents suffering unanticipated economic deterioration (circulation decline) from exiting
  • No proper recognition of specific costs factors escalation which can obviously adversely impact on ‘locked in’ newsagents
  • Newsagents getting less advantageous terms than big players like supermarkets
  • Newsagents supplied and charged for products that they do not want.
  • Unilateral variation of contracts.

Newsagents should read the submission in full and see first-hand the work of associations robustly representing newsagents.

Avenues we and other small businesses can take are determined by legislation.  This expert panel is advising a Senate Committee on matters which have the potential to impact our future.  The work by NANA and QNF is most useful for newsagents and other small businesses.

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magazines

new moon board game selling well

new_moon_game.JPGThe new moon board game based on the movie from the Twilight series has been selling very well.  This is a new category for us and we wondered if it would work – especially with the major retailers going so hard on this product.  We have done well by having the game in a good location and supported by professional merchandising and external marketing.  We were tempted to discount to match the K-Mart price but have found that this is not necessary.  Not all of our customers shop at K-Mart.

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Newsagency opportunities

100+ US newspapers close this year

Click on Paper Cuts Out of Print and see the daily newspapers in the US which closed down this year.  Each black dot on the map is a newspaper which closed.  Now, un-tick the 2009 box at the bottom of the map and click on 2008 and then 2007.  See the trend.

Alan Mutter (a veteran media executive) has written an insightful blog post about the closures and the state of play of newspapers in the US.  I urge you to read this.

While there are differences in our newspaper model here in Australia compared to the US, the fundamental challenges are the same.

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Media disruption

SA newsagents angry at ANF negotiations

The Australian Newsagents’ Federation (ANF) issued a bulletin last night about the meeting in Adelaide on Friday organised by two proactive newsagents to discuss the new News Limited contracts.  Click here to see a copy.

The ANF bulletin does not reasonably represent the debate around the representation of newsagents on the new contracts.  The state ANF representative talked with pride about the good relationship between the ANF and News Limited.  He said that the increase in delivery fees for country newsagents was a good outcome negotiated by the ANF.

Several newsagents challenged the ANF view of the increased delivery fees.  They asked if the ANF had put various scenarios in the negotiations – including what happens when someone moves from a two day delivery to a heavily discounted seven day delivery.  The ANF acknowledged that it had not explored this in the negotiations.  The anger in the room was palpable.

While around two thirds of newsagents indicated they were ANF members, the vote which should have been taken is whether the newsagents at the meeting were happy with the ANF handling of the negotiations.  I am told that a close to unanimous vote of NO would have been delivered.

This is a problem for the ANF.  SA newsagents are most unhappy and demonstrated this by organising their own meeting and attending in unprecedented numbers.  This unhappiness goes back to early ANF endorsement of the home delivery customer migration project – a News Limited initiative which seeks to shift management of home delivery accounts from newsagents to News Limited – risking traffic in retail newsagencies and driving a reduction in home delivery penetration.  The ANF endorsed migration without consultation with the newsagents set to be affected.

The ANF bulletin reiterates that they have authorisation to negotiate on behalf of newsagents.  Any properly consitiuted body can achieve authorisation.  The key for newsagents is that they are represented by people who listen to their situation and negotiate robustly on their behalf.

Click here to see my report of the meeting of SA newsagents last Friday.

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Newsagent representation

200 newsagents risk not receiving magazine invoices

Around 200 newsagents are yet to migrate to the new XchangeIT Link EDI platform.  These newsagents face not receiving electronic invoices from January 1.  They also facxe slower returns credits and other operational challenges.  With more than 2,500 newsagents already migrated, getting these remaining few would be good for the channel.

Newsagents who have migrated are set to have access to some excellent business initiatives in 2010.

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newsagent software

Books masquerading as magazines

magbook.JPGI received two titles yesterday from Gordon & Gotch which should not be sent to newsagents unless explicitly requested.  Body Art 3 and It Happened to Me are fringe titles.  They are expensive – $24.95, have a long on-sale and deliver magazine margin for book products.  Gotch should know better.  If distributors want to use my shelves in this way then they need to develop a different model which takes all the risk.  Let me pay on scanned sales only.  Give me free returns freight.  Oh, and pay me for the use of my shelves.

There is bound to be an excuse, there always is.   In the meantime, from the moment the titles land on my doorstep, I am responsible.  No wonder newsagents get angry.

Magazine distributors often say that newsagents complain, make mistakes and are late at getting things done.  If we did not have to put up with stuff like this maybe we’d have more time to work on our business.

I expect better from Gordon & Gotch.

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magazine distribution

The easy chocolate upsell

hilliers.JPGThe Christmas tree shaped visual merchandise unit from Ernest Hillier has worked a treat this Christmas.  I have it in several of my stores are we will sell out of all stock by Christmas Day.  The unit is easily moved – enabling us to try several locations over the last few weeks.

The best location in one of my stores has been at our main entrance – in front of the supermarket.  In another store it has worked very well at the counter – extending the basket beyond the destination purchase.

A newsagent friend questioned why I’d get into the Hillier range given that it is in other major retail outlets.  For me the answer was simple: Ernest Hillier is a known and trusted brand, the Christmas range is packaged for impulse purchase, they have good merchandise units I can easily play with the merchandise units and thereby have more opportunities to drive sales.

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confectionary

mania magazine car crash

mania_magazine_trash.JPGThe plastic car which came bagged with the latest issue of mania magazine was trashed yesterday.  Indeed, the cars in every issue we received were trashed.  Rather than give the kids a broken car, we removed it.  The alternative was to early return the whole issue.  Publishers and distributors need to take more care when packaging cheap plastic trinkets.

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magazines

Schapelle Corby sells magazines

fhn_ni_dec2109.JPGWe are promoting New Idea at our counter – between our two busiest sales points – this week.  We felt the Schapelle Corby cover story would resonate and rive sales.  It’s working well – sales are strong.  New Idea has had an excellent few months in our newsagencies – this display leverages off that growth. Our plan is to take the display down on Wednesday.

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magazines

News offers 20 to 50 cent newspaper delivery fee increase

Click here to see a copy of the notice issued late Thursday night by Advertiser Newspapers in South Australia announcing a highly conditional 20 cent to 50 cent per customer per week newspaper delivery fee increase.  This announcement was the next step by News in a protracted dispute over the new contracts and the News  Ltd migration project which seens to take control of customers won by newsagents through local marketing efforts.

The offer expires at the same time by which SA newsagents are required to have submitted signed new agreements with News.

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newspaper home delivery

New concept ‘newsagency’ in Victoria

nx_knox2.JPGLast Thursday, newsXpress opened a new concept corporate store at Knox City Shopping Centre in Melbourne.  While not yet fully stocked and with some adjustments to be made, the first four days of trade have been most encouraging. Click here to see a video walk-through of the store.

This store is different to the traditional newsagency because of the floor space, product mix, flexible layout and the strong corporate image.   This is a 130 sq m store, small for a shopping centre newsagency.  The layout is designed to drive a greater per square metre return and customer contact efficiency than you would achieve with a traditional newsagency layout.

But there is more to this store that you’ll see from walking through.  There are back end processes and in-store strategy which drive margin.

Is this the newsagency of the future?  I doubt it because there is no end point to retail innovation.  That said, this store reflects a considerable advancement on traditional newsagency layout, range and floor space efficiency.

Thanks to the design and build work by Interfit and their flexible and efficient space management system, we have a store which is completely flexible and which redefines a ‘newsagency’.

Disclosure: I am a 50% shareholder in this new concept store.

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newsagency of the future

Encouraging product sampling

sampling_pencils.JPGWe are encouraging shoppers to sample the O’BON pencils we have which are made from recycled newspaper.  By having test pencils and a sharpener, they can see the newsprint tightly rolled to make up the pencils.  This small piece of retail theatre makes the pencils a good performer.  It demonstrates the authenticity of the product as well as our trust in the product.  Putting a product on the shelf may sell, showing off the unique selling proposition is what can drive excellent sales.

Newsagents can own this green stationery space.  It fits with our businesses being local and community connected.

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Environment

Esquire launches iPhone edition

Starting with its January issue, the full version of Esquire magazine will be available for the iPhone and iPod Touch. The US$2.99 app will give digital readers a what they are calling a “reimagined” version of the print magazine. here is a video showing off the iPhone version of Esquire:

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magazines

Top Gear pocket diary extends the brand

top_gear_products.JPGWhen ordering calendars this year we sought our brand extension opportunities.  This Top Gear 2010 pocket diary is a good example.  We have this, the calendar as well as the magazine itself – a perfect gift package for a Top Gear fan.  We have a good selection of pocket diaries and calendars which are brand extensions of popular brands – beyond what the magazine publishers provide.  Diary sales are showing double digit growth on last year.

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Calendars

Cupcakes & Cookies popular

cupcake_cookbook.JPGWe have sold more copies of the Women’s Weekly Cupcakes & Cookies mini cook book from our Christmas area than in the usual location.  Placing this with our cupcake and cooking making sets and Christmas themed books has worked well.  We will sell out in the next day or so.  It’s important we don’t pigeon-hole products.  Not all magazines should be with magazines for example.

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magazines

Plenty of Carols by Candlelight programs

carols_2009.JPGKudos for the folks at the Herald Sun for giving us enough Carols by Candlelight programs to give away with the newspaper yesterday.  We had enough for our needs as well as thoss who purchased newspapers elsewhere.  Unlike the DVD and CD promotions recently, stock was not an issue and we were not abused by irate customers.  If only they could get supply right like this for all promotions.

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Newspapers

SA newsagents form group to discuss contracts

sa_newsagents.JPGMore than 170 newsagents met in Adelaide yesterday to discuss the new contracts from News Limited. Over the course of three hours a many views were shared. These ranged from information on problems with the News Ltd migration project (were News takes control of the newspaper customer from the newsagent) to the threat of total loss of newspaper sales should a newsagent refuse to sign the contracts.

The meeting was attended and addressed by three politicians: John Darley – Independent Member Upper House SA; Steve Georganas MP Federal Member for Hindmarsh; Robert Brokenshire MLC – Family First Member Upper House SA. They committed to helping newsagents achieve an equitable outcome and expressed their support for small business – not just lip service but practical support. Nick Xenophon, while not in attendance, had a representative there to indicate his personal interest in this matter.

The most significant contribution at the meeting came from Professor Frank Zumbo from the University of NSW. Frank outlined several go forward options for newsagents based on his reading of the proposed contracts. He also provided useful commentary on legal avenues as well as an understanding of the challenges of various options open to newsagents. Frank’s options were discussed by the meeting and plans made to make progress on these.

News Ltd sought to take some sting out of the meeting by announcing a deal late Thursday which they had brokered with the ANF. This deal offered SA country newsagents an increase in delivery fees if they met certain stringent conditions. Unfortunately, the deal could see some newsagents worse off if their customers move from a two day a week delivery to a heavily discounted seven day a week delivery. The mood of the room was one of cynicism and disappointment with the deal and that newsagents had not been robustly represented in the eleventh hour talks.

Three larger postal boxes in the corner of the room showed what newsagents can do – they contained proof that customers did not want their details handed over to News Ltd.

Kudos to the two newsagents who independently organised the meeting. This shows what newsagents can do when they work together.

I am grateful for the opportunity to participate in the meeting. It highlighted to me the extent of the negative impact of the new contracts and migration on the family businesses represented. It also demonstrated that newsagents are prepared to unify around this issue.

I am not reporting here in any detail on the meeting as this would provide News Ltd visibility of the options under consideration.

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Newsagency challenges

Will NDD just close?

With the loss of News Magazines titles from April next year (see Sally Jackson’s story in The Australian yesterday), a question must hang over the value remaining in the business. While some connected with NDD will say there is plenty of value left in the business, I am not so sure. Magazine distribution is an expensive business and profit relies on volume. With the loss of significant volume, NDD has some challenges ahead.

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magazine distribution

Mini cookbook bundle a hit

acp_bookpack.JPGThe Women’s Weekly mini cookbook bundle has been a stand out success for us this Christmas.  We have sold out of one pack and are doing very well with the second.  While the right product is crucial to any success, a key factor in our success with this title was our dump bin strategy – this was placed in an easily accessible high traffic area between our main newspaper stand and our counter.  I expect that had we treated this as a regular magazine title sales would not have been as good.

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magazines

Best and Worst for 2009: Who double issue promotion

fhn_who_dec1809.JPGWe are promoting the Best & Worst for 2009 double issue of Who at the counter this weekend. The Michael  Jackson photo alone will help drive sales.  We also have the issue on display at our Tattersalls counter as well as its usual location. While Diabetic Living did well at the counter, earlier this week we feel we will get more impulse business from Who this weekend.

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magazines

London newsagents pay to distribute free newspaper

According to a report at the Guardian, dozens of newsagents in London are paying 2 pence a copy to distribute the now free London Evening Standard from their shops.  Two months ago the Standard went from a paid model (50p) to free at the same time as changing its distribution model.  Newsagents wanting the traffic are demonstrating a preparedness to pay for this.

Will we do this here?

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Newsagency challenges
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