The question independent small publishers most often ask is what alternative do they have to the current magazine distribution model in Australia. The reasons they give for wanting an alternative are:
- A disconnect between them and their retail partners (newsagents).
- Untimely sales data – they can wait months.
- Cash flow challenges – i.e. when they get paid.
- Fees – the various fees they pay for distribution and returns.
- Product mix – where their products fit compared to others distributed by their magazine distributor.
It is interesting comparing their concerns with concerns often voiced by newsagents. Newsagents and independent publishers could work more closely together. There are some titles which would work well outside the traditional sale or return model as long as we establish appropriate processes between publishers and newsagents for their respective businesses to work. This is why I have been meeting with independent publishers recently.
Publishers and newsagents make money from retail sales. Magazine distributors do not make money from retail sales. there are some titles where a direct publisher / newsagent relationship would benefit both sides far more than the tri-way relationship we have today.
We are moving closer to a publisher offering to supply newsagents direct. I am all for this and would gladly participate in a well organised and managed trial.
Now we’re talking !!!!
Happy to offer any help in any way I can.
Mark, I suspect this is “pie in the sky” because logistics is the problem and always is. Logistics and cashflow are our enemies. I give you your usual A+ for initiative though and I don’t mean to be negative about it.
I actually have changed the mix in my retail shop quite spectacularly to reflect the issue. Magazines are still a vital part of my business but papers e.g. are only 7% of my mix and ergo are only receiving 7% of my efforts. Stationery (good, funky, different plus traditional) and gifts are certainly getting far more attention from me than they used to receive and it is working. I am seriously considering removing the word newsagency from my BROWNS OF BURNSIDE sign to reflect the change and to ensure I don’t get lumped in with the perception that “newsagent” or “newsagency” is a
dinosaur (I hated John Hartigan saying that but I am sad to say he was right) There are still some woolly mammoths out there and they cannot last.
June,
Have you thought of a name for the concept to replace newsagent?
Mark, NDD is for sale… create a Newsagents CoOp to buy it, transform it into the business you describe above.. Just give IPMG a call to discuss price!
@Brett; From what I see, newsagents hardly sell just news anymore.
It can’t be called a gift store, nor can it be called a convenience store, and it’s above being called a variety store.
Would be interesting to find a new name for newsagents
Aaron, I agree. Its been driving me nuts for ages. I went down the line of Infocentre first but that did not cover the depth and breadth I am aiming for in stock. If I was in the US I would be a drugstore but that does not work here either.
Mark, great idea for a competition, name that store!
Infocentre just reminds me of an information desk…. which would work if you were in a shopping centre.
and isn’t a drugstore in the US a pharmacy?
June, the alternative is to do nothing. Where would that get us?
On the name, I am biased but I suspect it comes down to brand. newsXpress, newsXpower, nextra – they can all stand for something.
I think the days of a generic shingle for our businesses are past.
Mark,
I know what you are saying but I think that the Australian will always have a generic name – the servo, the fisho etc etc. I still think that we need something that says what we are not something that we used to be.
Newsagencies are called ‘Paki Stops’in London for some obscure ethnic reason. However they dont seem to be suffering the same hangups as some of you about your midlife business identity crisis.
At the end of the day you are a newsagency and branding is a non-issue.
The brand names of Newsxpress Nextra Supanews, Newspower et al have little impact on the consumer as to which of the businesses to patronise. At the end of the day you are just a newsagency so stop trying to reinvent the wheel
When people ask for directions, they ask “where is the newsagent”. They don’t ask where is the Nextra, Newspower or Newsexpress. Newsagent is a generic term that is commonly used and even if you take it out of your name people will still regard you as the newsagency.
I can not believe it myself but i agree with anon
anon, there are newsXpress, Newspower and nextra newsagents who will disagree based on their experience of consumers seeking their businesses out for what their brand offers.
Take newsXpress, the last campaign was direct mailed to 1 million homes. Do this four or five times a year plus a couple of TV campaigns and you bring recognitition to the brand and what it stands for.
Marketing groups are differentiators – that is what we will see when we look back.
It is so true,no matter what people want to believe it will always be a newsagency or the papershop..
Newsxpress ect mean nothing to me and I am sure to many thousands of other customers.
Mark has his own agenda in this and wants us all to believe that newsxpress is the be all and end all for all newsagents.
mary, I don’t have an agenda. I encourage newsagents to join a marketing, any marketing group. Sure I am with newsXpress. I see Newspower and nextra doing good things and have said so here previously.
You are wrong about it always being a newsagency or a papershop. So wrong.
By the way, it’s newsXpress but, hey, you already know that don’t you.
this will upset a few but for me newsxpress and alike are for people that cannot do there own homework eg we do mail out we do all our own posters we have our own branded stationary we look long and hard to find suppliers we have all the sales that you would find others doing i think you just have to be on the ball . and for me in my town no one cares who you belong to as long as you offer great friendly service with a smile and just get to know the customer . In my town if you had a look at my competition that are both branded newsagencys you will realise that it means nothing to be branded .
Branded newsagencies are not the panacea for this industry despite the self interest comments posted here of which I understand the reasoning behind, however in my limited belief it is the entreprenurial capabilities of an astute owner/operator combined with pride in the appearance of their workplace and the degree of professionalism delivered by handpicked staff that will compete at any level that so called leading branded agencies purport to.
Do your own survey and ask the next fifty customers exiting your business what is the name brand of the newsagency you have just visited.
I did and the results justified the comments posted here so there is no urgency for non branded agencies to ‘fall in line’with allegedly better operators.
Shaun, Anon,
Some consumers will never break their habit of recognising cerain businesses by their industry. To them it will always be a pharmacy, newsageny, service station, supermarket, bottle shop, etc.
But for many consumers brands play an important role in their decision making and shopping experience. Our town has a younger family demographic – which makes branding an essential part our retailing. More people call businesses by their names as opposed to their industry. Its the Shell or BP instead of servo, and Blooms instead of the pharmacy, IceBox instead of the bottle shop, etc.
It takes time to build a brand in localised regions. Its taken us almost two years to noticable change consumer habit and have the recognise us as newsXpress.
Not having people recgnise a newsagency is most often the fault of the newsagent. Simply being part of a marketing group, puttig up a sign and distributing the odd flyer isn’t going to change how consumers see you. It needs to be reflected in everything you do. Unfortunatly this is where many newsagents fail.
Shaun, as for branded stores being “for people that cannot do there own homework”, id like to see a non-branded store try and achieve the things acheived by the head ofice teams of newsXpress, Netra and Newspower. I can’t count the number of suppliers newsXpress has introduced to us that we never would have found otherwise. And no non-branded store could ever acheive the trading terms negotiated by the head offices of brands.
You might be interested to know that had the majority of the independat supermarket industry not embraced brading whe it did – many would not have survived the growing prescence of Coles and Woolworths. It was do or die and for its own survival the industry stepped up. Indepedant supermarkets aliged under the brands of IGA, Foodworks and others are now in an increasinly strong position and achieve growth above the rest of the inustry.
You also might take some time to look at the number of pharmacies that are branded. Those that are branded outperform those that aren’t.
As for you doing “all the sales that you would find others doing” – I very much doubt it. There are sigificant number of promotions run by newsXpress that we participate in that no one else in the industry runs.
A consumer goes to the servo for petrol. If BP is cheaper this week then I would conclude that their sales are up. If Caltex does it next week then ipso facto the same happens. Where then, is the consumer loyalty to that or any other brand that you so regularly trot out about newsxpress, when that loyalty is easily compromised by a competitive price cut next door at newsagency xyz.
Branding is important to you because you have chosen that path to pursue but you are looking through the eyes of the retailer whereas the consumer looks through the eyes of the weekly budget.
I doubt any consumer would ‘go the extra mile’ (another shopping centre as an example)to a newsxpress agency just because it is branded newsxpress if for example a supanews or nextra agency that is adjacent to their woolies or coles had the same or similar product available at the same or similar price.
Consumers are habitual by nature in their shopping patterns for the weekly groceries and patronise the nearest newsagency because it is simply easier.
It makes absolutely not one iota of difference what the branding is of that newsagency they attend. It is simply the newsagency and to say you hold a competitive edge because you have struck backroom deals that leave everyone breathless is just a closed mind attitude.
I had a customer up from Melbourne once that came in to my agency in Qld (having surfed the web) because it was the same brand as her local agency and she knew that she would receive excellent service. That is where branding comes in, getting used to a certain style.
Conversely, people about my size will always go to a newsagency or the papershop (generic) but what will the children growing up now go to when there will be possibly no news to be an agency for?
That is what I would like to see, us moving towards a certain future not waiting for it to catch up with us. So therefore, what will we be called?
I doubt very much that someone would specifically search out your branding because that person believed she would receive excellent service. Excellent service has nothing to do with branding and to think otherwise is erroneous. Excellent customer service is still available in non branded newsagencies so you comment is an insult to those retailers.
I still dont get the angst about the name newsagency – get over it
Anon, Specifically you are right especially in the Country or within a Village atmosphere Branding is not important all that you say however is.
The perception of Branding being beneficial to the store owner in the City however is mostly within the industry. Shopping Centre Managers think it’s good for Branding makes it easier to deal with and presents a unified image (a little stereo typed but it’s what they want)Independent operators within Branding have raised doubts with some shopping centre owners as when they have financial difficulties theire is no body to bail them out. Some have closed their doors and unlike franchises the Brand can not guarantee their debt. The public as you say don’t give two hoots about the brand compared with service, convenience and price. Servo’s , Chemists and Hardware Stores are evidence of this. Mitre 10 is a classic example of a public unlisted company that is full of independents.The takeover bid with Metcash and the interview with Mark Burrows Mitre 10’s CEO mentions the difficulties in independent management. One of the reasons that one to one contracts are so hard to answer as an industry. One does not suit all.
As for Brand loyalty at this level exttremely small if anything at all.
Having said tha Branding will continue as it has done with Pharmacists for years. Bottle shops (independent) are constantly changing names from Any Capp (remeber him) to bottlo, Harvest Celebrations Cellar Door etc etc. It boils down to whether you want to belong or you don’t.
Jarryd,
You are correct in what you say. Branding is essential in modern retailing. I can name many international brands that fight hard for their name and image.
The consumer is not just looking for price, its the whole experiential retailing that gives the consumer comfort knowing that the service and product will be consistent.
Chemist warehouse, Bunnings, Amcal, KFC, etc etc. They all stand for something, and those of us that join marketing groups want to stand for something above and beyond what a traditional cluttered, newsagency stands for.
Rome was not built in one day, so it will take us many years to get the recognition that we strive for.
Brand your business and stand for something special within our industry.
Chris
Reservoir
There is too much variation in groups, every store no matter the group is different. Owners put themselves before the group and thats their downfall. The group that can get compliance will win. The existing groups whilst OK need to put compliance before growth and even get rid of some stores and put the future before present profits. IGA is a good example of this and thats why they can compete and compete very well.
But if you visit a number of stores of a brand, sure they look and seem the same, but depending on the staffs customer serivce (or lack thereof) it can be quite a different experience.
personally there are a few kfc’s i would never go to (poor customer service, people cooking with untied, long hair, extremely slow, etc), but i’d happily go over to another kfc just because i want my wicked wings.
Anon,
Price is actually much lower on the list of consderations made by consumers when making a decision. That you think it is the major facor in their decision maing process shows how little you know of the importance of branding.
It is also intresting that you think consumer shopping patters are habitul. Consumer shopping patterns are changing all the time. The techniques used in successful branding ventures exploit this to their advantage.
If a consumer sees a product in both a, for example, Coles and Supanews then their decision would be based on many factors. For example, if the customer percives that Supanews presents a better offer in terms of store asthetics, customer service and product knowledge then that consumer is more likely to purchase the product from them. Without a brand however, there would be less reason for that consumer to choose the newsagency over Coles becasue they don’t associate these benefits with the store.
Im not sure how you jump to me being ‘closed minded’ from my assertation that marketing groups negotiate better trading terms for their members. I never said that it gives them a competative edge. Better trading terms are designed to improve profitability. They are not directly related to the relationship a brand has with consumers.
Anon, no one is saying that excelent service is not available in non branded newsagencies. What we are saying is that good service in one branded store means that the custmer is likely to associate good service with all those same branded stores. I’ve walked halfway accross Melbourne CBD to get a birthday card because I associated the store with having an excellet range. There was actually a newsagency next to my hotel, but I didn’t even bother going in there because I had no idea what they were offering.
Graeme,
Clearly all those multi-billion dollar developers that like to have branded stores are wrong. And likewise, all the businesses they seek out have wasted time and money building their brands.
To say the public don’t care about brands is irrational. Market research shows time and time again the massive role branding plays in the modern marketplace.
No one has said that branding isn’t more difficult with indepndant operators than with a traditional franchise or corporate operation. It is more difficult, but certainly not impossible. In fact IGA has done a great job of tuning the independance of their operators into a successful positive marketing pitch.
Jarryd
I have given my opinion and when you say you have walked “halfway across Melbourne CBD to get a Birthday Card”
Get real if this is your example of Branded Loyalty. you are a Joke oops a jerk
Jarryd this group knows that I have never agreed with you even though sometimes you may make a good point its because basically you know everything and from the place of experience you just don’t cut it. Be a bit humble and don’t be somebody elses stooge.
anon et al, every comment here has self interest attached to it. While I am connected with newsXpress, my various other roles in the channel see me working with and supporting other marketing groups as well as independent newsagents.
My core agenda is for newsagents, every newsagent, to develop a stronger business based on better margin and more sustainable traffic.
A good independent newsagent can be tremendously successful by developing their own brand around service, range and other values.
A group of like minded newsagents can do this nationally – there is where the marketing groups can play a role.
It is unfortunate that some with agendas of their own choose to try and shoot messengers here. I agree with Jarryd’s points.
Landlords have made their decision on what they want. Talk to AMP, GPT, QIC, Centro, Westfield, CFSPM etc and you will hear the same message. They want branded businesses, especially in the newsagency space.
The best example of branded loyalty in our channel is in ink. I have seen a consistent brand based campaign change consumer behaviour in favour of the newsagent. And, yes, I have heard of people driving across town to buy from the newsagent – even for cards sicne there can be a difference in the card offer.
Every newsagent needs to stop fighting about minutiae and start focusing on new traffic, new money and healthier margins.
Aarron
To a certain extent you are correct. However ponder the reason you go to KFC its because its a unique product. If a customer walks out of a newsagent, depending on the product they are looking for, they can go to a card, shop 7 eleven, supermarket, officeworks, Big W, Kmart, Target or a petrol station to get what they need. KFC is chicken but it is unique to that chain, nothing a newsagent sells is. So if they don not get it right the first time the customer in most cases goes elsewhere. Ask people outside the channel what they would do?
Unlike the other groups the one belong to doesn’t rely on the news or newsagent name. I also don’t mention my group in this forum not becuase I am not proud of it just this isn’t the place to have a pissing competition.
Our brand name does get mentioned to me from time to time by customers. They have seen a television add, one of ten of thousands of flyers, or visited another store. I would say that 99% of customers don’t shop exclusively with any other shopping enviroment apart from groceries. As been stated before on this thread fast food, petrol, newsagency etc the customer will shop where they feel comfortable or it is easy not typically brand. Sure I will look for a BP first but if a Mobile is closer then I will buy form there.
Back on the posted discussion point. Publishers who want direct relationships with newsagents could only deal with a group. Logistically they could ensure the complainace nor make sure they cover all opportunities. However in saying that The Gold mag does do a good job with this.
Brad
Be loud and proud about your brand. Andrew Reitzer from Metcash is. As I do not know you, my advice is take your group above and beyond, have a unique selling proposition and only employ the best possible people and if you have t pay them more, do that too.
I do disagree that people do not shop exclusively except for groceries as the australian retail landscape changes as brands align themselves with certain suppliers, people will shop on marketing. Brand recognition is of utmost importance, so do not, do not let anyone damage your brand as you are only as good as your weakest link. aldi whilst privately owned only started doing TV advertising when they had 200 shops, before that they worked on getting their model right in Australia. Yes even the $40 Billion german Giant had to perfect their model, so like IGA and Metcash discipline is important as is adapting to change.
John,
Very proud of the brand but this forum tends to lead to the who is better than you tack. Yes brand is vital but at this stage of our evolution I feel the market see’s the product as the brand rather than the store. My opinion I may be wrong and happy to take what comes of that.
Aldi is a good example of verticle intergration. Yes they had to get things right but as I understand them they only stock their goods. ie sourced or manufactured by them.
My group is built around compliance and adhereing to that. I could honestly say that not all do this but the ratio would be no different to that of IGA.
Brad proud member of The Lucky Charm
Brad
Well done in being loud and proud.
I did some quick research of your group on the net. Some things you need to pursue to be successful in this space are, giving your franchisees access to funds though a single banking relationship, loans for expansion, refitting and overdrafts for stock replenishment. Superior relationships with suppliers in all categories you play in, only select and attract the best possible franchisees, this includes forgoing larger turnover stores who want to do there own thing. Have a unique selling proposition for your group and make yourself a wanted commodity by landlords and forgo sites that are unprofitable. I have been into many newsagents in my state. Your brand is not in the state I live in but they are all different. I am a retailer and not a newsagent. The one thing I know is brand is important but it is only as good as the people in it. Eliminate weak links in your chain and bring in retailers not people who have bought a business to buy themselves a job.
@John – I have been following your comments on this blog and I must admit that I totally agree with your point of view. The entire notion of desperately hanging onto the protectionist fairytale of yesteryear is exactly what is going to make us an extinct species.
Graeme,
Attack my points, but don’t attack me and expect to have your words taken seriously. Put forward an argument that refutes my own and im happy to engage in debate about the issue.
@John; I actually wasn’t purposely trying to make a point about KFC or whatever, I just had cravings.
I’m pretty ignorant of things that go on in ‘the channel’ and in retail in particular, mainly cos i’m an 18yo, first year uni student with other stuff on my mind.
But i do follow some of the discussions here because they are rather interesting although seemingly irrelevant to me.
John, Great points. I am sure if you asked all groups their motto is to only attract the best. In reality this channels suffers from no real leadership and plenty of nay sayers.
I do however see that if one of us can get as you suggested a means to have funding, ensure complete complaince and build water tight relationships with major suppliers then we will prosper. The key as been stated in hundreds of comments here and on other blogs is over coming the sins of the past.Whilst we keep bringing up BE, WU, nothing will move forward.
John very keen to keep dialogue going so please send detailks through runawaybay@theluckycharm.com.au
Jarryd,
You have a point. I shouldn’t personalise any point of view. I should, as you say attcak you view point and discuss the to’ and fro’s.
I will take back the personal point by not addresssing it to you or about your experiences.
The conten of my disagreement is now the same as it is in the previous email to the subjects mentioned.
How can one say with absoluteness that branded stores outperform those that are not.
Humphrey’s of Manly for one may disagree. The largest newasgency in Australia is an Icon in itself. Self made, John grew it from a very small base, small than most newsagencies. He has tried most of the brands in this industry. Manly Newsagency would have done just as well providin John owned it. The key is the management and the way it is run. Put the both together and that’s fine however the branded store without a management model is not as good as the unbranded store with top management. Ther I have given just one example that you have asked for.
It is plain as day that there are many points of view discussed here. This is healthy but I really don’t wwnt to get to I’m right you’re wrong type of discussion. It is point scoring and can go nowhere.
The industry is clearly at a croos roads and the new contracts offered has caused newsagents to re evaluate this product and its worth to the channel.
Like a lot of us here I have my view. I would carefully weigh up the value of that product to me. Profit per item to me is not a consideration when it has an overall benefit to the business. i.e. in lost leader etc. One of our biggest problems is that we compare “apples with oranges”. One of the biggest advantages we have with selling newspapers isthe volume of traffic and the multiple sale that volume produces.
In a paper presented to Citigroup clients last week , Mr Dart of accounting firm Moore Stevens said one of the biggest problems facinf Woolworths was the lack of sufficient “volume” products that attracted people to hardware stores. There was no equivalent in hardware of the milk and soft drink lines that grought peole into the supermarkets, he said.
This is why Woolworths and Coles sell newspapers @12.5% it is traffic. This is their way of merchandising and ours to learn.
The problem within our industry, is that the newspaper is our bread and butter line for a great number of newsagencies, and if that goes, so does the newsagent.
We need a better solution than to throw ou the “baby” with the bath water.
It cannot be a “one solution fits all” for it is not the way we are structured.
Yes, it is 1 minute to midnight and at midnight we are pumkins. There is no glass slipper after and after midnight has passed there will no search for reunion.
Many decision rightly or wrongly have been made within i minute.
It is within the time and not too late to do something positive.
Jarryd, this is my focus and whilst like others I get frustrated by examples of what is wrong I see no examples of proposed “cure” for this problem.
It isn’t too late tghe time in fact is right because this is the first time that so many have taken so much interest in anything affecting this industry in 10 years. Talk to each other, ask for meetings with your Associations. It is your contract and you owe it to yopurselves to not be too busy to be well informed so that you can make the decision as to sign or not sign.
Graeme, It is inaccurate to say there is no cure. I see data regularly from newsagencies which are growing traffic and margin.
Again is identification with the problem what I clearly said “I see no examples of proposed “cure” for this problem. Mark you are not giving an example of cure only stating that others are growing in store traffic etc. All of which is great The cure is how are they doing it? Last paragraph post 41. I was referring to examples.
Graeme,
I don’t see associations playing a role in this. Newsagents, the stakeholders, must find the solution.
This blog has plenty of examples of the cure as you call it.
It comes down to entrepreneurship. Finding a need in your community and filling it. Leveraging excellent existing traffic into sales of better amrgin products.
Individual newsagents and newsagents in groups are playing and it is through this playing that each of us will find our own cure.
There is no cure for the channel. The opportunity for that passed years ago.
Mark
post 42 you say there is a cure yet in post 44 you say there is none.??
confused
Pro,
No cure for the channel, no big move we can all make.
That said, there are individual cures (I don’t like the term) we can are are taking.
There are newsagents who are building better margin businesses, others increasing traffic, some doing both.
It is up to us, individually. It’s our money after all.
Hi Graeme,
Thanks for your reply. While we don’t usually see eye to eye, I do like that we “keep each other honest” as they say.
On an ad-hoc basis I can’t say that all branded stores outperform those that are unbranded. However, from the data i’ve been shown it is clear that as a group, branded stores outperform those that remain unbranded.
Humphries is an interesting example. I would actually, in most scenarios, consider Humphries a branded store. They employ many of the disciplines that a larger brand would embody. While they obviously miss out on the benefits of a national brand and having a head office, Humphries is, as you say, the largest newsagency in Australia. That puts them in the unique position of having commercial leverage and resources that the vast majority of stores could never attain on their own.
A store’s management model will always reflect on its performance. But I would argue that a store with good management would perform even better with the benefits of a brand.
A good brand will be selective of the stores it takes on. If it doesn’t enforce some level of compliance then the benefits won’t show.
For the record, we chose not to renew our News Limited contract when it ended just over a week ago. Our Fairfax contract will end in the first few months of next year.
All newsagencies are “branded”. It’s just that some are part of bigger brands than others. “Tom’s Newsagency” is as much a brand as “newsXpress” or “McDonalds”.
It is, however, unusual for a brand attached to a single retail store to be in the same power league as one with many. Though I don’t know it, “Humphries” would appear to be such a brand.
Mark’s list of shopping centre management companies that prefer “branded” businesses is interesting, given that until a few years ago, only Westfield branded it’s centres with a unified brand. Even today, many only use the company brand in a secondary way.
It is better to have an “independant” brand if the groups on offer are of low quality, or are internally inconsistant. Becoming part of a chain can also be expensive and/or have other problems.
As for what newsagents will be called in the future, it may well be that they will be better known by the name of their chains. But I suspect they will be called “newsagents” long after they they stop selling news products.
It will be interesting to see if there will be businesses in the future with the stationary/giftware/lotto combination that (along with periodicals) characterises Australian newsagencies.
Where the domination by newsagencies of the lotto/scratchie market lost (say to supermarkets, servos and pubs), given the expected death of printed publications, many newsagents would find themselves becoming “gift stores”. Even if newsagencies retain gambling services, those doing so would likely increasingly be seen as two different type of store stuck together in an unatural fashion.
hi,
love this site – helps me understand the newsagent’s perspective.
I own a small media company that is about to launch a new magazine. I don’t want to distribute through G&G or similar as the area (region) we want to distribute to is quite specific.
I would really appreciate any feedback as to whether this is possible, and how to go about it.
We think there are about 30-40 newsagents we’d like the magazine to be distributed to.
Are we best to develop a relationship with each or is there a more efficient or preferred model in working with newsagents?
Thanks!
Bec, If you know the newsagents or at least the areas in which yoou want to distribute, make direct contact, offer better than average terms, support thhem and you should achieve good support in return.
Thanks Mark,
Sounds like a plan!
Bec