Some newsagents have been discussing how the channel could/should respond to the story in Crikey yesterday newspapers taking their brand online and mobile. Newsagents were created by publishers and are feeling somewhat left out of future plans by publishers. I posted a response to the email based discussion and thought I’d post it here as it covers some of the areas I’ve blogged about in recent times:
Our three key traffic areas are newspapers, lotteries and magazines.
Newspapers are reinventing themselves based on US and European experience. This reinvention is in pursuit of the online and print customer. Online they are acquiring businesses left right and centre. Offline they are developing new direct channels – petrol, coffee. While newsagents will remain important to them, they are not where they expect to achieve growth. Publishers will disagree but time will prove this assessment right. For our part we need to reinvent how we retail newspapers. This means breaking some rules. Smart marketing groups like newsXpress provides members with strategies which are boosting newspaper sales.
Lotteries are moving online. Tattersalls is there and have been for close to a year. It’s their biggest growth area. LotteryWest has announced and Golden Casket is online too. This will have a bigger impact on our stores than the newspaper online play. We can respond through exceptional service and providing product offerings not available online. Now more than ever we need to be exceptional retailers at the lottery counter.
Magazines are playing online too. Look at www.explode.com.au, www.vogue.com.au, www.zooweekly.com.au, www.cosmosmagazine.com.au. These websites demonstrate a focus on online compared to the newsagent channel. I don’t begrudge what they are doing – it’s smart for their businesses. Our response on magazines has to be to demand more equitable supply arrangements. The current model is broken and we are bearing the cost. Magazine sales will rise and fall for a few years yet before we see a significant drop in all but the major weekly and monthly titles. Newsagents need to focus on these popular titles now. Spending time of fringe titles provides a lower return. My magazines were up 22% in March 05 compared to 04. That’s in an old shopping centre. There are strategies which work.
There are ways newsagents can respond to these and other challenges. The scope of change we are confronting is equivalent to a business tsumani. We can see it coming and have seen it for some time. My pitch is that we get on a surfboard and rise the wave. No one is going to protect us. No one is going to fling is a life raft. Our suppliers must do what is right for their shareholders. Newsagents need to do what is right for their businesses. They need to embrace change for their benefit. I am happy to be an investor in newsagencies because the future is bright. This is why I joined newsXpress and have invested in the group. Newsagents have other options. To do nothing might give you some nice pictures of the tsunami wave coming in but you’ll have no-one to show them to.
Rather than the fluff at the ANF Hamilton Island Conference, the ANF ought to have invested equivalent dollars in mini conferences around the counter closer to newsagents so these issues can be discussed and strategies is response developed. Newsagents crave practical ideas they can implement today. If I want to feel warm and fuzzy I’ll cozy up to an open fire with a bottle of red.