I am told that a newsagent is facing a threat of legal action from an employee who claims to have been injured while delivering Saturday newspapers weighing close to 1kg each. I’d expect the matter to be resolved rather than allow the problem of fat newspapers to get into any court forum.
Piet Bakker’s Newspaper Innovation blog reports that the New York Post is offering home delivery on subscription for US$13 a year or 5 cents a day. We have a way to go here in Australia before we hit 5 cents a day – except for the university, football club and gymnasium deals.
One outcome of the new media laws could be a more competitive newspaper marketplace and lower newspaper subscription costs – and a drop in what newsagents are paid to provide the service. Newsagent leaders are likely to accept this as their view in the past has been that anything, even a loss, is better than nothing.
Bob Garfield invites us to think about the unthinkable, a world without brand advertising. In The Post Advertising Age, published by AdAge, Garfield lays out why he thinks such a world is approaching. He questions the evidence some use to say all is well when he writes about newspapers and magazines:
There are some clues in a February speech by Timothy Balding, CEO of the Paris-based World Association of Newspapers: “What we are seeing completely contradicts the conventional wisdom that newspapers are in terminal decline. … The fashion of predicting the death of newspapers should be exposed for what it is — nothing more than a fashion, based on common assumptions that are belied by the facts.”
Balding’s set of facts comes courtesy of the proliferation of skimpy freebies, such as Metro, which are to newspapers what Skittles are to cuisine. His rosy outlook, however, does sound familiar. In the halls of media power, the optimism seems positively infectious. Jack Kliger, president-CEO of Hachette Filipacchi Media U.S. and chairman of the Magazine Publishers of America, declared this spring: “We are no longer threatened by digital media.” Perhaps he didn’t notice the precipitous drop in readership, what with the industrywide circulation fraud and all. Or perhaps he was busy killing ElleGirl and Premiere, but never mind. He’s dug in: “I’m not ready to end up my career watching our industry get marginalized and fade away.”
Newsagents are regularly being told that the talk of doom and gloom is misplaced and even mischievous. Newsagents are being misinformed by publishers and their mouthpieces because ignorance among newsagents serves publishers well.
Jeff Jarvis offers, as usual, an excellent perspective on the Garfield article at his BuzzMachine blog including this:
And what he’s really saying behind all that is that the fundamental economics of media are, if not imploding, deflating. That is a big deal and has implications we can’t yet imagine in media and marketing as well as in the proliferation of small media that can afford to live without big marketing — if it’s ready. Hang on. It’s going to be a bumpy ride. Downhill.
It suits newsagents to listen to publisher claims that it is business as usual – we’re too scared to contemplate the reality. It also suits newsagent associations to remain silent on what is really happening since they rely on publishers for funding.
The facts as shown in the balance sheets of publishers in Australia and overseas speak for themselves. Smart newsagents see this and are adjusting their business models accordingly. If only more would do this and, at the same time, exert more control over their businesses and, in particular, supply arrangements with newspaper and magazine publishers and distributors.
This is what newsagents must discuss. Nothing else matters right now but the disruption our channel faces.
One reason I started this blog was to educate Australian newsagents about the changes which will affect their businesses. I have no doubt that Jarvis, Garfield and many like them are right. We are in for a rough ride. But it is a ride newsagents can survive and even enjoy if they take the reins of their businesses and stop allowing publishers to control their lives.
The Washington Post has just concluded a 27 part series on US lobbyist Gerald Cassidy. What is interesting about this series is that the first installment was in the print edition and all subsequent installments were published online. It’s a smart move because the publisher wins kudos for an extensive work yet does not have the high cost associated with print to publish. I wonder if we will Australian publishers start a series in print and continue online only?
The Inspire Action blog has some interesting comments about the Washington Post move.
The New York Times reports that US newsmagazine The Week is publishing an online only bonus issue sponsored by Lexus. This is another example of a publisher understanding the opportunity for growth from online distribution versus offline. Jeff Gomez has some good points to make about the move at his Print is Dead blog.
The folks at the week are doing what they need to do to build their audience. Retailers of newspapers and magazines need to make equivalent moves to find new customers in the changing world.
Here is Australia Post’s latest retail catalogue. It strays further from the products and services permitted under the Act yet the politician don’t care. They don’t care that more than 850 government owned retail outlets take home and small business stationery sales from newsagents under the successful and respected Australia Post shingle.
This latest catalogue promotes: plush farm animals; USB sticks; copy paper; office stationery; Norton security and plenty of other items which have nothing to do with providing a postal service.
I am angered than the Federal Government has allowed Australia Post government owned stores to encroach deeply into newsagent territory unchecked and that the politicians who have presided over this don’t even have the guts to answer simple letters of complaint about the unfair competition. If it were their personal investment being eroded by a government enterprise I am certain their would be action.
Their excuse is that Australia Post needs to diversify to cover its costs. If that is the case why is this an Australian problem. We don’t see it in the US, Australia, France or the UK. Indeed in the EU even the postal service is about to become highly competitive. Here, Australia Post has protected foot traffic and they leverage that to take sales from newsagencies like mine.
In Tasmania today I noticed this newsagency for sale in Sorell. I like they way they are promoting the business boldly across their front window. It has a good main street location and a decent floor space.
We have made space for a School Holiday Fun table at the front of the shop. We’ve brought together products from various categories in the newsagency which relate to the target demographic: 5 to 12. Art products, magazines – K-Zone Total Girl and others, textas, scrap books, pads – anything likely to help with school holiday activities. Even Sudoku and other small puzzle titles.
It’s a healthy table – no candy. It’s about interaction. None of the items is on special as this is not about price. The table is a service to parent and grandparents wanting something to do with kids on holidays. We’ve skirted the table with a quick School Holiday Fun skirting which, next year with more time, we could make look more attractive.
What I like about this home grown marketing idea is that we’re promoting across the categories and doing it in a way which is focused on helping people through school holidays. It’s about customer service and being attuned to customer needs.
Memo to magazine publishers: while this may not be the sexy magazine display you’d like to see promoting your titles, it’s an example of how newsagents can tell a story with your titles as the hero and thereby demonstrate why they are retailers you ought to nurture more rather than seek competitive outlets to.
I’m proud of our School Holiday Fun table – I hope other newsagents copy it.
Newsagents in NSW tell me they have been hammered over Easter as a result of the bumper edition strategy adopted by Fairfax for the Sydney Morning Herald. The duplication of some parts of the newspaper over two days confuses customers. Other customers are angry when the newsagent does not have the stock of both parts to make a ‘whole’ newspaper. Staff in newsagencies Friday and Saturday copped a fair beating from customers over this.
Being Easter, Newsagents have no one in authority at Fairfax to take the problems to, they are left to deal with customer anger alone and in the way of these things, the impact on goodwill is felt by the newsagent and not the publisher.
What newsagents want is the newspaper of the day to be provided to them as a complete unit for delivery. Not a bit today which is also to be used tomorrow and not at a quantity which someone in Fairfax controls as opposed to the newsagent applying local knowledge.
While the Fairfax executives reading this will say, here he goes having a whack at Fairfax again, I invite them to actively engage with newsagents across NSW on this issue – find out how botched the bumper edition strategy is and how much it upsets customers and newsagents.
In Victoria we have smarter people working at Fairfax and The Age this Easter has been bumper edition free.
Fairfax is running a competition to promote over the counter sales of The Age. The prize is a $5,000 shopping voucher. To enter you buy the Age and fill in an entry.
This is a good promotion for customers but maybe not so good for retail only newsagents.
I am suspicious that the data gathered could be used to offer home delivery deals to the entrants which does not help or respect my business at all – but I acknowledge that it would suit Fairfax’s business goals perfectly.
If building a marketing database is a goal of this campaign then I would prefer Fairfax to offer me something for active participation – like a retail retail pick up subscription offer as I blogged about two days ago. Such a win win approach would find greater support from the growing band of retail only newsagents.
To the Fairfax people reading this – don’t worry, we have the entry box at the busiest point on our counter – prime real estate – as well as the posters displayed in store.
The noise in our shop and back room has been debilitating this last four weeks, so much so that customers turn and walk out. Magazines have been the hardest hit. Our sales growth is consistently above average yet over the last four weeks, magazine sales are down 17%. Magazines are a browsing experience and with the retail space so uncomfortable people don’t browse and so they don’t buy.
We’re talking with the landlord about the financial impact of the noise.
Victorian based Fitness First members have been offered The Age newspaper home delivered for 12 months on a Friday, Saturday, Sunday and Monday for $49.00. The usual price is $348.00.
While I agree it’s reasonable for Fairfax to tap into organisations like Fitness First with a mutually beneficial offer, I wish that they would provide an offer I can pitch to my retail customers. I have Age customers who are more loyal to The Age than new customers attracted through the Fitness First offer yet they have to pay full price. The loyalty of these customers goes unrewarded.
I’d like Fairfax to offer newsagents a subscription like deal for loyal home delivery customers. This would be demonstrate the importance of these retailers in Fairfax achieving its sales goals. As it stands today, the message for consumers is – don’t pay retail.
The downside of the home delivery offer is that Fairfax and News will continue to cut costs from the home delivery service – meaning that newsagents will make less and less per paper delivered. Newsagents carry a cost of deals like the Fitness First offer even though they have no control over the terms.
I heard Neil Mitchell on 3AW this morning talking about poor customer service. The examples Neil gave were from big businesses so I emailed him saying small businesses are champions when it comes to good customer service. He read the email on air and noted that I own a newsagency. He also mentioned the good service he gets from his local newsagent. Well done whoever that is!
It is feedback like this which can help strengthen customer perception about newsagencies and newsagents. We should not be afraid to step up to the plate on talkback radio and elsewhere in the media and remind people of our commitment to exceptional customer service.
Good personal customer service is a point of diffrence we can own.
Kudos to Neil Mitchell for shaming those who provide poor customer service.
When I first blogged about Stickypoint, the Australian cannabis magazine, in January I also wrote to Wrapaway, the distributor. They have ignored my request and sent six copies of issue 2.
I don’t want this magazine. There is no category in my newsagency relevant and it will offend my core demographic. That a magazine distributor ignores my request toe cancel the title and grab another $50.00 of my cash for a few months is appalling behaviour and fuirther evidence of how newsagents are abused by the broken magazine supply system.
Like other newsagents, I want more good magazine titles and less junk.
In partnership with easy being green we have become carbon neutral for the next year by purchasing carbon credits. We have also committed to reducing our emissions, improving our recycling program and cutting overall energy use. Through newsXpress we are active participants in a printer cartridge recycling program for our business and for our customers.
By stumping up cash to achieve carbon neutrality for the next year we have put our money where our mouth is. We have also committed to being better citizens. Many of us saw the Al Gore film, An Inconvenient Truth, and have been challenged to reduce the damage we are doing to the world.
We could have quite easily not taken this step – I don’t expect it to generate extra sales for us. It’s not about profit. This is a decision I made as part of our commitment to genuine social responsibility.
While the big end of town gets kudos from Planet Ark, I am pleased to have found a partner interested in working with small business not only in achieving carbon neutrality but also in offering educational facilities so we can make a more practical contribution.
Some newspaper publishers don’t make easy for newsagents to manage the home delivery process. While News Ltd and Fairfax (belatedly) gave newsagents warning, some rural publishers only announced their plans Easter late yesterday – leaving their newsagents scrambling to get IT systems adjusted at less than 24 hours notice.
The time wasted making these last minute adjustments and printing new one off delivery run lists takes newsagents away from managing Easter trade. And publishers wonder why newsagents don’t comply with their requests.
On an average week newsagents receive between thirty and fifty important communications from suppliers which require action. This is on top of usual communications. Throw last minute notice about handling Easter into the mix and no wonder some newspapers don’t get delivered.
Publishers need to streamline how they communicate with newsagents. Newsagents ought to demand this. The current approach sets newsagents up to fail.
Last year I proposed something I called One Calendar – a common calendar based interface between suppliers and newsagents. Only one supplier put their hand up as interested even though it would have worked with all IT systems and offered an each IT interface between suppliers and newsagent computer systems.
It seems to me that some suppliers prefer to keep newsagents beavering away with archaic business practices.
Easter is an odd season. We’ve had our greeting cards out for a month and they have been selling consistently – we’ve needed extra stock to cover the demand and we should finish the season up 20% on last year. We’ve had our Easter Eggs out for three weeks and sales have really only kicked in this week. It’s been a busy three days. We’ll beat last year but thought going out early we might do even better.
Easter is a great feel-good season – especially when you have access to the well packaged Darrell lea product. The margin is tight but having an exclusive offering makes it worthwhile. I am surprised more newsagents don’t chase the brand. The bright packaging allows us to tell a good retail story.
We’re cracking product open today and giving a small egg to every customer. Saturday is our Easter Egg hunt … hmmm, that could be interesting.
The Herald Sun AFL cards promotion is generating a sales kick of more than 25% compared to last year. Even though there have been some challenges getting stock it’s a good and welcome campaign which drives such a traffic boost to your store. I’m just glad I am not in Adelaide where News Ltd prefers BP over newsagents for such promotions.
RealMoney.com commentator Jim Cramersays that lack of financial acumen is burning newspapers:
All of these companies seem to be run, frankly, by jokers or dreamers who had no idea how to deploy capital.
These are diminishing assets. They don’t need to exist. Younger people rarely read them. And the companies acted like they would always be in demand and were simply misunderstood by Wall Street. Nope, Wall Street got it the whole time, except a couple of hedge and mutual funds that are trapped and trying to get managements to do something to bring out value.
No misunderstanding where he stands.
I am hosting, through my software company, a series of business round table sessions for newsagents over the next few weeks. These will be proactive and open discussions among newsagents who want to achieve the best from their businesses. Free of politics, I am hoping the sessions will help those participating navigate challenging business issues – come along prepared to actively participate.
The round table discussions are being held prior to user meetings for newsagents using Tower software. Any newsagent is welcome to attend. I promise, it’s not a sales pitch.
The businesses round table starts at 10am (sharp!). The user meeting will start by 11:45am. Locations are: Sydney. Tuesday April 17; Brisbane. Wednesday April 18; Melbourne. Thursday April 19; Canberra. Friday April 20; Geelong. Tuesday April 2; Hobart. Thursday April 26; Adelaide. Tuesday May 1; Perth. Wednesday May 2; Newcastle. Tuesday May 8.
You can book by emailing bookings@towersystems.com.au. We need your business name, the session you are booking for and the number of attendees.
Based on bookings for this first set of dates we will add Cairns, Wollongong, Darwin and Gold Coast next week. We don’t announce all at once as the meetings are expensive in terms of labour, room hire and travel costs and we like to gauge interest in the series.
It’s easier to copy than innovate I guess. Newsagents now have not one, not two but three major ink and toner campaigns running thanks to the launch last week of something called Inktek by the Victorian branch of the ANF newsagents association.
While the competition is healthy and will force the two established players Newsink and newsXpress (of which I am a shareholder) to be more competitive, I question whether it is smart to launch another newsagent connected ink and toner brand in what is a well serviced marketplace. If it were up to me I would guide the non Newsink and non newsXpress newsagents into equally profitable yet unchartered territory.
I know a bit about the ink and toner space having been involved with the original group out of which the Newsink group grew some years ago and having started Inkfast two years ago. Inkfast is a pure online play. It generates fifteen to twenty times more monthly ink and tiner revenue than my newsagency – orders are bigger and involve quite different product. On the downside the margin is slim, hence the focus on volume.
While ink is hot, newsagents are competing with Australia Post, Big W, K-Mart, Dick Smith and Harvey Norman. It is the categories these majors ignore which provide newsagents with better opportunities.
The original consent granted for the distribution of mX, the free daily newspaper from News Ltd, in Sydney was for eighteen months. News’ subsidiary Nationwide News has applied to the Sydney Council seeking to modify the development consent to sixty months. Check out the documents available at the City of Sydney website. They list distribution points including newsagent kiosks. The documents make for interesting reading for anyone curious about the distribution of free daily newspapers.
A letter from News’ planning consultants notes that during the current period of consent Council has advised News of only one complaint and that related to litter at one location which was corrected. I am surprised that there have not been more complaints about litter on trains, buses or ferries.
Readers tell me that mX serves its mission well. I don’t find it satisfying but I am not in their demographic. My interest is more in the impact that mX and or any other free daily newspaper might have on newspaper sales in newsagencies, especially given that the same publisher dominates the paid and free channels.
The 100th issue of Burke’s Backyard magazine has been a huge success. While most TV related titles die when the show is taken off the air, it says something about Don Burke’s profile that his magazine has lasted this long without the weekly airing of the show. We sold out of the 100th issue in a week.
NDD continues to demonstrate their skill at magazine distribution with the scale out of Kitchen Trends. This title has a low sell through and a shelf life of six months. It is loss making for us and, I suspect, many other newsagents.
If NDD were leading the way in magazine distribution, as they claim on their website, the quantity they send and the shelf life would be configured so as to be profitable.
Newsagents cannot afford this behaviour yet they are too time poor to follow up – a situation exploited by NDD in their model.
Scrapblog takes scrapbooking online with the added benefit of connecting you with a community of folk who do the same. Scrapbooking magazines are an important category in any newsagency.