I met with people in Sydney today who want to introduce a service to the newsagency channel. It is unlike any product newsagents sell or have ever sold. Further, it doesn’t fit with existing categories most newsagents sell. They have little money for promotion. What we need is 1,000 shops offering the service and that will make it successful.
They say they chose newsagents because we are small business people and are more likely to help their small business.
The last thing our channel needs is a service from which we make less than 10% and that relies on leveraging existing newsagency traffic to achieve revenue.
If the service was certain to generate net new traffic maybe and only then if the margin was considerably higher than 10%.
What worries me is that if the people I met today go to one or more of the associations representing newsagents they may get support if there is something it for the association.
We do not need more leech products and services – you know, products and services that rely solely on our existing traffic to be successful. I am not sure newsagent associations see it that way, especially those making decisions on behalf of newsagents who are not themselves newsagents.
Retail businesses in our channel need net new traffic. For the most part, achieving this is up to us, individually in our own businesses – based on our inventory decisions and our out of store marketing.
I do not see evidence that newsagent association folk understand the net new traffic imperative.
You are right, we do not need foot traffic builders that do not pay their own way. The days of being used to start up products for low commission are over. Unless you are the ANF… It’s like they are giving the impression we are desperate for anything.
Yes Chris the messages of desperation from the ANF and others are miscast and unhelpful.
Any updates on tolling payment fees??
The system seems to be that these businesses close down their bricks and mortar facilities because they cost too much, then fob off the income collection service to newsagents and convenience stores for a pittance. Im guessing that the cost of simply opening the doors of a bricks and mortar store (rent, outgoings, electricity, insurance, terminal fees, staff) is somewhere north of 10% of sales in most newsagents. So that should be the starting point for agency commissions (including Tatts I might add). All the smart commercial cookies love the online business model cost profile, but still want a bricks and mortar presence. Well guess what – that costs. And in a world of decreasing bricks and mortar options, the industry associations should be in a position to bargain hard on the payment levels required to access our channel.
Ladbrokes?
I have never met with Ladbrokes or discussed getting their products into newsagencies.
Amanda/Mark – Whilst the Ladbrokes deal for a newsagent might net less than 10% it is part of a multi-product system that takes up less space than a single magazine title. The exciting part about the opportunity is the generation of new traffic and/or increased visits based on the platform and our supporting advertising campaigns. This is probably the first TV commercial I’ve ever seen that featured a newsagency and now we have two new campaigns to support the program, millions of dollars will be spent to drive traffic in to the stores and to support the owners who are backing the program. We’ve also got an amazing offer for our customers coming next week that will really boost the program forward and drive thousands of new customers in to stores across the Country. We continue to get very positive feedback from newsagent owners and I can’t speak highly enough about the owners and employees who have really got behind the product, you guys are amazing. I am impressed by the support we’ve received for the roll out and in general how well the program has been received in all stores. I do hope I get the chance to meet both of you and the partnership with agencies will continue to flourish.