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

John Brumby’s small business credentials

myki.jpgI was privileged to spend an hour and a half yesterday meeting with representatives of the Victorian Government’s Transport Ticketing Authority along with Peter Cowley, CEO of VANA, Don MacAskill, National Policy Manager of the ANF and Bernard Zimmermann from POS Solutions. The meeting was called to brief the TTA on how newsagents could easily implement support for the new Myki transport ticketing solution when it launches in a year or so.

Given that we already sell phone recharge, gambling account top up and payout, and a raft of other ‘soft’ products direct from the newsagent point of sale, the technical aspect of the discussion was easy. The key is to show the TTA and their prime IT contractors for the project how this has been achieved with many other third parties including some businesses putting more sales through than planned for Myki. Direct from within the Tower software newsagents are selling phone recharge, betting account recharge and other products. Next week we commence a trial which brings significant new product exclusively to the point of sale.

I am confident that software developers talking with software developers will demonstrate how easily the TTA goals can be met and that newsagent can sell Myki recharge – replacing MET tickets – can be time efficient at any register point.

The more significant conversation was around commercial terms – even though this was not the purpose of the meeting. It was not a negotiation session and nothing was agreed. I was glad to be able to switch from my software company hat to my newsagent hat.

I was surprised to discover how far the TTA appears to have gone in their relationship with 7-Eleven on Myki. This is not a good look for a government which talks up its small business credentials. I would have thought a government concerned about small business would have made sure that small business newsagents, the group which sells half tickets sold at retail today, was locked in early. Now we are playing catch up.

I was also surprised to discover that as a newsagent I am, on the current terms, being asked to take a 66% cut in commission. Sure I will not have to carry stock, but a 66% cut when rent increases 5% annually and wages between 5% and 8% annually is, by any measure, uneconomic. This, again, from the Victorian Government which beats its chest about small business.

The final surprise came from the fees which would apply to newsagents if a customer uses a Myki card to pay for other products – this is yet to be approved by the State Government. The planned fee is 2.5%, putting it in the realm of American Express or Diners Club. Given that shopping centre newsagents have occupancy costs of around 11% and labour costs of around 11% and shrinkage of around 3%, there is little room with which to absorb a 2.5% cost on a transaction.

I appreciated the time the folks representing the TTA gave to the robust and somewhat off topic commercial discussion. They were generous with their time and did listen to the points made. I expect that we will demonstrate newsagent software capabilities and that this will get newsagents closer to an even footing with 7-Eleven. This should open the door to a robust discussion around commercial terms for newsagents.

Bernard Zimmermann’s post on the meeting can be found here.

The image used on this post is the trade marked Myki logo. Their website has more details.

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Ethics

The Classic John Wayne Collection

john_wayne.jpgThe Classic John Wayne Collection is the newest partworks and smart newsagents are promoting this as a Father’s Day offer. It is the perfect gift for the man of the house. The John Wayne series brings all the drama and action that only John Wayne can portray. There are not many partworks for men so having this one at this time of the year is ideal. The series follows John Wayne’s career, from silent roles to his most famous Westerns.

This week we have John Wayne placed next to Father’s day product. Sales are good. Next week it will be pitched with other new partworks at the front of the store.

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magazines

Peter Brock tribute

peter_brock.JPGThis tribute to Peter Brock from the folks at Wheels magazine is a good offer. Outside of car racing Peter Brock is loved by Australians.

By packing the Brock tribute with a couple of back issues they are attracting new readers to their offer and saluting the master of car racing at the same time. I often complain about bonus packs of magazines. This time it makes sense – the special tribute will attract new readers who may be interested in the back issues. Where this process is abused is if publishers back back issues of a regular issue of a magazine – issues the regulars have probably read. Well done to the Wheels team!

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magazines

Book sale great for Father’s Day

book_flyer.jpgOur book sale is surpassing all expectations. $1,000 a day in sales from retail space which is not costing anything and in a mall where half retail space is closed due to major refurbishment and where the entrance next to our business is an obstacle course due to external works. For us, the book sale we are running is saving Father’s Day.

What is driving this sale is the brochures. They are generating more calls and foot traffic than almost any other recent promotion. Brilliant!

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Book retailing

Branding and blocking glue

bostik.jpgAs part of comprehensively rebuilding our stationery story around brands we have decided on Bostik over UHU for glue.

The photo shows the start of our work around the Bostik brand – by blocking the display.

We are stocking glue items traditionally sold in newsagencies as well as several new lines. The glue gun and associated glue sticks are certainly new.

Once we have brought in all the new ranges, throughout stationery, we will then work on display. We know, for example, that we can better display this Bostik product but we’d rather get the one and half pallets of additional product in store before we make it all look sexy.

The brand choice was made around depth of range and ease of service supporting the brand.

The stationery makeover is seeing us move every item in the stationery department, quitting around 30% of what we have and bringing in two pallets of new product. It was long overdue but delayed because of the major works being done to refurbish the shopping centre.

The project should be completed within two weeks.

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Stationery

Girlfriend premiums

girlfriend_oct07.JPGGirlfriend magazine wins an award for the number of tip one – giveaways – with this month’s issue. Bagged with every issue is Eyeliner DUO, Rexona antiperspirant, and Carefree tampons.

It’s a challenge to display with the gifts – the magazine is bulky and ungainly – but they are well suited to the target audience. They are ideal premiums even though three in one month is a surprise.

Some wags in our shop this morning were joking about the three gifts – making up all manner of stories. Ah, boys…

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magazines

Handymen and bikinis

handyman.jpgWhat’s this girl got to do with Handyman magazine? I guess she is dressing for the DIY pool/outdoor story. I wonder what will be next – bikini girls draped around roses on the cover of gardening magazines? I am no prude, far from it.

I see this cover on Handyman as visually lazy. If you need a bikini girl to sell a handyman magazine what does it say for the content?

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magazines

Who cover…

who_sep07.JPGI am uncomfortable with the Who cover story this week about Owen Wilson. It provides public coverage to an event which, in my view, is best dealt with privately.

Views have been expressed by medical experts in the past that reporting on suicide needs to be handled very carefully, if it is covered at all. Splashing this on the front cover is not something I expected from Who.

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magazines

Is Saturday the best card selling day?

card_s.jpg

The rule low hanging fruit: it is easier to drive more success from something which is successful than to make something which is not successful a success.

I have been fortunate this week to be involved in Business Roundtable discussions with newsagents in Melbourne, Brisbane and Sydney where we delve into the performance of the newsagencies represented by those participating. Using reports from the Tower newsagency software we have been looking at business performance from a number of consistent angles. It is the day by day basket analysis which has interested me the most.

In Melbourne on Tuesday, during the roundtable, I noted that greeting cards were in more shopping baskets on a Saturday than any other day in one newsagency. One participant said this was because shoppers had more time on a Saturday. In Brisbane yesterday, another colleague said it was due to weddings in their area – Saturdays being the wedding day. Now, after looking at data from more newsagencies, Saturday does appear to be a stand out day for greeting card basket penetration in newsagencies. Checking data from my own newsagency I can see this is the case.

So, what does this mean? How can we use the data to our advantage? The first step newsagents ought to take is to report on basket penetration by product category by day of week. The Tower software provides this as a standard report.

In a practical sense, knowing the popularity of Saturdays with card buyers enables us to be more attentive, make sure the card section is clean and tidy, staff up to help customers who want it and consider Saturday only offers.

The rule of low hanging fruit in retail means it is easier to drive more success from something which is successful than to make something which is not successful a success. This is a rule I just made up – it is true though – if greeting cards are more successful for you on Saturdays than other days and in more shopping baskets it will be easier for you to leverage more greeting card sales on Saturdays.

Basket analysis such as this available direct from within the software can really help newsagents understand the flow of business and therefore find valuable low hanging fruit opportunities.

I’d be happy to work with any newsagent wanting to undertake deep level basket analysis and compare their business with the pool in my benchmark group.

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Greeting Cards

Publishers versus analysts

While publishers talk up newspapers, analysts paint a different picture. Read what Fitch Ratings had to say two days ago about newspapers in the US. While the US market is different to Australia, newspapers rely for a chunk of their revenue on advertising. The pressures in this regard are4 the same in the US as they are here.

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Newspapers

Insights from magazine partworks meeting

partworks_pitch.JPGI was fortunate to meet with Gabriel Ladikos yesterday from Gordon and Gotch. Gabriel manages partworks within Gotch. He has been with the company for seventeen years and working with partworks for thirteen.

While I will not cover some of what was discussed in confidence here, I would observe that, as with all things in life, there is more to partworks than we see in our newsagencies. For example, orders are placed with publishers eight weeks in advance. These orders are based on sales achieved in the UK for the partwork already as well as trialled in Australia – usually South Australia or Western Australia.

The eight week in advance orders can be problematic when a national release performs differently to the UK and trials. Then, publishers need to either weather the storm of backorders waiting for returns or air freight stock to Australia – if such stock is available.

It is in this area of forecasting for more certain supply that our discussion was most interesting.

While I knew that partworks are sold through supermarkets in New Zealand, I did not know that they were sold through Tesco stores in the UK. Newsagents in Australia have exclusivity on partworks. This is one reason I love them – especially those supported with TV campaigns tagged to newsagencies. When I see those I know it is essential to promote boldly in store to connect with the TV coverage.

Gabriel outlined some improvements coming up with partworks. These will apply to Parts 11 onwards for all partworks. No change will occur for Parts 1 – 10 to allow the partwork to settle in and allow newsagents to establish their customer base for each partwork.

Weekly partworks’ onsale will reduce to 7 days and Fortnightlies to 14 days. The second recall will remain and will appear on returns forms 2 weeks after initial recall. This will provide a weekly with a maximum on sale period of 3 weeks, and fortnightly 4 weeks.

This change will provide both newsagents and Gotch with a faster turnaround to ensure better allocations and speedier backorder fulfilment.

The hour and a half with Gabriel was insightful – on both sides I suspect. One outcome will be better dialogue on how to create more valuable win win win situations from partworks. Publishers want to sell more product. Gotch wants to sell more product. Newsagents want to sell more product. If we understand each other better we can achieve that.

Partwork customers are more likely to purchase another product in your newsagency than any other customer – this is based on 2005/06 basket research. Their efficiency and value demand support from newsagents.

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partworks

ACP Newsagency of the Year

nx_gympie.jpgI didn’t stay for the ACP Connections conference dinner last week and missed seeing Warrick and Jo Hoskings and the team at newsXpress Gympie received long overdue praise from ACP and their peers by taking out the top award.

As the photo shows, Warrick lit the room with his Connections Emerald green suit – and this is what I really want to blog about.

Warrick has fun in his business every day. He makes it his business to have fun. It rubs off on team members and customers. In a country town with seven newsagencies, the fun focused strategy is working.

While his business faces the challenges all of us face in our newsagencies, by riding above that with an attitude of enjoying the business helps keep focus on a key point of difference.

Take a look at the photo and see a newsagent who makes it is business every day to enjoy his business.

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Newsagency challenges

Beware the good mate rep

I was working with a newsagent a couple of days ago, looking at the performance of some categories of stationery. They were clearly overloaded – the stock turn for this particular category was a third of stationery overall. The problem was with the buying, some very bad and expensive decisions had been made.

It turned out that the representative for the supplier calls on the newsagency every few weeks and does an order. The newsagent would have none of my view that the rep was part of the problem. “He’s a good bloke” , the newsagent said to me. Well, he is a supplier and only makes money when he does an order with you. We’re mates. Maybe, but he is a supplier. He wouldn’t do wrong by me. He is – you don’t pay his wage.

Too often reps overload newsagents with stock. The great deals are designed to shift product to the retail floor. Occasionally there is a flow on for the consumer but more often the deals lead to more stock and stock on its own does not move any faster.

I suggest to newsagents that they put a stop to reps calling unless the data the newsagent has supports regular visits and agrees with proposed purchases. Otherwise, you’ll end up like my friend – with boxes of stock which will need considerable discounting to move.

Sales reps are your suppliers first, chasing a buck, and your mate second.

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Stationery

The invitation wall

invite_wall2.JPGThis photo shows part of the new invitation wall we are experimenting with in our Sophie Randall Cards and Gift shop. It follows the blocking approach we have been using in our newsagency for our new stationery layout.

Early indications are that the full face display will easily justing the real-estate commitment. Customer feedback is excellent. Indeed, we are planning to increase our range by 50%.

The only challenge of the fixturing is that it cannot hold as many packets of each design as we would like. Given that invitations are purchased in a minimum of two packets – managing non displayed stock properly is crucial.

The question we are asking ourselves is whether an invitation wall like this would work in our newsagency. The shopping experience is completely different between the two shops. We will have the space in the newsagency once we remove the Christina Re range.

Invitations are good business and price is less of an issue we expected. Done right, they can set you up for excellent add on business – matching stationery for the party and the like.

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Greeting Cards

Stationery brand poll for newsagents

Jarryd Moore has a timely and welcome poll at his news4newsagents blog asking whether the generic Sovereign branded product should be included in the GNS Christmas catalogue.

Regular readers here would know that I would prefer to see all newsagent stationery warehouses provide better support for national brands and less for house brands. Newsagents would be better served leaving the house brand game to the majors. Consumers think we are expensive so they are less likely to visit our shops looking for a lower cost house brand.

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Stationery

Selling magazine freebies

I was in a newsagency the other day and noticed a discount box near the entrance. In the box was a mixture of items – all priced at $2.00. What surprised me was that the items were the freebies provided with magazines, taken off copies prior to return.

Newsagents doing this need to consider how this looks to customers and employees. My view is that it is something a cheapskate would do. I think this is how employees would see the activity. From a customer perspective, you have to wonder what they see as the connection between the discount box and the main-game products in the newsagency.

I respect that newsagents have the right to run their businesses how they see fit. However, we all need to understand that we do under our newsagency shingle reflects on our colleagues.

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Customer Service

Giant book sale

book_flyer.jpgWe re-launched into books last week based on a four page A6 flyer – sent to 15,000 homes around our centre. Our supplier overprinted the brochure with our details – always helpful in driving traffic back to your particular store. While we have played in the book space previously, this is the first time we have supported the category with a concerted campaign outside our shop.

We are supporting the catalogue with considerable stock displayed in front of our newsagency (see the photo below). While the flyer and range is Father’s Day themed, all categories are selling well – far better than expected.

What’s also interesting is that the sale is drawing people into the shop who would otherwise have passed us by. I especially like the browsing, and business, immediately prior to Australia Post opening each morning.

giant_book.JPG

We’re not in books at this level for the long haul – I see it as something to run three or four times a year with a smaller range in store in between. The folks at Australian Book Wholesalers have been very helpful.

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Book retailing

Buying paper for the environment

Give then noise about the paper mill planned to be built by Gunns in the Tamar Valley Tasmania, I was interested to read a report published in May by Access Economics on paper and the environment.

Commissioned by representatives of Double A paper, the study analysed the environmental impact of major paper manufacturers around the world. The report lauds Double A paper as being environmentally sound:

Considering a wide range of environmental issues relating to paper manufacturing, Access Economics estimates the environmental cost of Double A paper to be just over $16 per tonne (or 4 cents a ream). This compares with a cost of $80 per tonne for a leading brand of Australian copy paper (see table and chart below).

Double A’s environmental advantage lies in its pulp sourcing (from farmed eucalyptus trees grown by farmers along the edges of rice plantations) and its ability to be self-sufficient in energy via its carbon-neutral biomass-fuelled electricity generating plant. In addition, waste water is treated by ‘extended aeration activated sludge’ process and recycled to irrigate trees and to cool the power plant without discharging into public water sources. Moreover, high
rainfall in Thailand means that the opportunity cost of water used in the paper making process is relatively low. As such, Double A outperformed recycled paper from the United Kingdom, and its European and Finnish counterparts.

I’m please to read this because Double A is the premier brand of paper we stock in my newsagency.

While I am against the Gunns paper mill, this report from Access Economics brings the issue of paper back to consumer choice. What we feed into our printers every day is as important an environmental decision as whether the mill is built. It is why I will continue to support Double A paper.

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Uncategorized

Making magazine putaways work

morse_putaway.jpgThe bar-code label (circled in yellow) on the cover of this issue of Inspector Morse partwork is central to our management of putaways. When the customer collects the title we scan the barcode and record that this specific copy has been collected by the customer. If it’s billed to their account we track that. If they are to pay we track that.

What is important is that at any point in time we know exactly what titles are in stock and waiting to be collected – without having to go through our putaway drawers.

This customer level control by title helps us improve customer service – more certain putaways when titles arrive, better allocation in the event we are short supplied and less chance of being left with uncollected stock.

Customers like the fact that their putaways are professionally labeled and barcoded in this way. Given that putaway customers spend more than almost any other category, the extra effort is well worth it.

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magazines

Keytek goes direct and undercuts newsagents it supplies

Keytek, the high profile compatible ink and toner supplier to newsagents and which, as I understand it, supplies Officeworks, competes with those it supplies through its PrintXpress website. PrintXpress is very price competitive – undercutting many retailers it supplies through its Keytek parent. It’s disappointing that Keytek is harming its business partners in this way.

UPDATE: 30/8/07. Chris Watts, Marketing Manager from Keytek called me today and explained that PrintXpress was a test site and was never meant to go live, that it was his initiative and not Keytek’s as such, and, that they were not out to compete with newsagents and other retail customers. On the evidence, the site was live and it was competing against Keytek customers.

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Stationery

APEC Summit too much for Sydney Morning Herald

APEC is affecting more than the streets of Sydney when the circus rolls into town. Check out the note the newspaper experts at Fairfax have just sent to NSW Newsagents:

Fairfax will produce a Bumper Weekend Edition of The Sydney Morning Herald over the APEC long weekend which will retail for the normal Saturday price of $2.20 (incl. GST) for the entire on sale period.

DISTRIBUTION (NSW/ACT):

“SPECTRUM” SECTION
• Sydney Metropolitan newsagents will receive the “Spectrum” section on Thursday, September 6, one day earlier than normal.
• Country NSW/ACT newsagents will receive the “Spectrum” section on, Friday, September 7.

“THE FORM”
• The Form will be distributed to newsagents on Friday, September 7 as normal.

FRIDAY (Public Holiday) – September 7, 2007
• You will receive a supply of the early edition of the Weekend Bumper based on your past sales of Bumper Editions.

SATURDAY – September 8, 2007
• You will receive a supply of an updated edition based on your past sales of Bumper Editions. The updated edition will have the latest news and sports content.

KEY OPERATIONAL POINTS:

SHOP SALES & GENERAL RETAILERS

• On both Friday, September 7, and Saturday, September 8, the APEC Bumper Weekend Edition of The Sydney Morning Herald is to be sold complete at $2.20 (incl. GST).

• Please ensure that The Form is available as normal to retail customers on Friday, September 7.

HOME DELIVERY CUSTOMERS & FAIRFAX SUBSCRIBERS

• 5 day (Mon-Fri) customers should only receive a delivery of the Bumper Weekend Edition of The

Sydney Morning Herald on Friday, September 7.

• The Form customers should receive their delivery as normal on Friday, September 7.

• Daily customers should receive a delivery of the Bumper Weekend Edition of The Sydney Morning Herald on Friday, September 7, AND should receive a delivery of the updated edition with the latest news and sports content on Saturday, September 8.

• Weekend only customers should only receive a delivery of the Bumper Weekend Edition of The Sydney Morning Herald on Saturday, September 8.

We appreciate your ongoing support and professional approach to the Herald Bumper Editions and are sure their success will continue.

Just when one would have thought the city’s newspaper of record would want to show off, it goes for the Aussie long weekend.

These distribution plans considerably increase the workload on small business newsagents without any compensation. They demonstrate a lack of respect from Fairfax.

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Newsagency challenges

Impulse crosswords

crosswords2.JPGOn Friday last week we created this display of a small selection of Lovatts and Puzzler crossword titles in front of our photocopier and next to our main newspaper stand to drive impulse sales.

We have added close to $100.00 in sales in four days – from this stand.

While we cycle other categories through this display, the performance of crosswords is particularly strong. I think this is because the category lends itself to impulse purchase with our core demographic – older, heading to retirement.

We selected Lovatts and Puzzler since they are brands crossword consumers know the most. Our experience with impulse displays is that you have to make it easy for the consumer. Brands are key to this.

We will leave this display run for two weeks before replacing it with another category.

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magazines
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