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

Author: Mark Fletcher

No upside in over the counter bill payment

I do not see any upside in over the counter bill payment for newsagents.

With online widely available and becoming more secure, the barriers to online payment are reducing.

Suppliers, too, are embracing online, offering rewards for paperless (online) transactions.

Banks and suppliers, too, are making scheduled payments easier and this helps with family budgeting.

A study from 2011 by the RBA provides the most recent insight into this area of online bill payment.

While these are important, the other factor for counter (OTC) bill payment is the demographic. OTC bill payment customers are likely to be older. This means a higher time cost to process, more complaints and less likelihood of add-on purchase. These three points are based on anecdotal evidence from recent years.

If we go back to the time of Bill Express, the OTC bill payment service on which newsagents lost tens of millions of dollars, shopping basket data from that time revealed 80% of bill payment transactions were bill payment and nothing else. So, there is an efficiency question for retailers – efficiency not only at the counter but in terms of space used in-store to pro one the service.

Another consideration is the growth opportunity. Will OTC bill payment grow? Unlikely. There are many other upside opportunities available to newsagents.

For me, though, the biggest factor in the consideration of OTC bill payment is that it is agency business, business for which the retailer receives a small fee that is unlikely to reflect the true cost of providing the service and that in providing the service higher margin opportunities are interrupted or stopped. It is not good business in my view, it does not fit with my  business model.

Once I define myself as a retailer, decisions about agency lines is clearer.

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Newsagency management

Someone forgot to change the cover price of The Age

Fairfax announced the cover price of The Age would increase to $3.00 from today. Here is today’s front cover, showing the price still at $2.80. The circulation folks at Fairfax are in for a busy day and the folks responsible for production are likely to have a worse day … unless they delayed the increase because of Richmond’s historic win.

That the old price is still showing on the online edition indicates they are yet to realise.

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Newspapers

Newsagency management advice: challenge a prospective employee on a trial shift

Giving a prospecting employee a trial shift is a good way to assess their value to the business. Too often, however, trial shifts are not structured to challenge the candidate. My advice today is that you structure a trial shift, always make it the same, so you can reasonable access the value of the candidate.

Here some tasks you could set for any candidate during a trial shift:

  1. Create a basic product display. Clear space, give them the products in a box. Explain what you are looking for in terms of outcome. Get them to do the display. be sure to leans some tricks in the box. For example, a damaged product, products without pricing, signage that has nothing to do with the display.
  2. Vacuum. Show them the vacuum cleaner and ask them to vacuum the floor. Their attention to detail will be telling.
  3. Their observation. At the end of the shift ask them to list the top three things they think should be changed in the business. Their response will demonstrate their observation skills as well as their preparedness to actively contribute.
  4. Mystery shop. Have someone they don’t know shop with them and throw up some challenges. This mystery shopper should assess the experience.
  5. Serving. At a busy time at the counter, leave them alone for a moment to see how they react.

A well structured trial shift is a terrific way to access the suitability of a candidate. The key is to have a process you follow each time, to know the criteria you will use to assess their suitability.

Footnote: always pay candidates for trial shifts. See what FairWork has to say.

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Management tip

Newsagency marketing tip: bring warmth to your shop layout

Best practice in retail layout and fixtures today is to no longer use traditional built-for-purpose fixtures. The more everyday warm furnishings you use the better, with different colours, shapes, sizes and textures. Real life used is even better. Sorry traditional shopfitters.

No longer does everything you use to display and hold product need to look the same or connected.

Here is a good example from a leading US fashion and homewares store I saw recently. Their use of the cupboard is exactly what I am talking about.

Click on the image for a larger version.

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marketing

An excellent example of terrific visual merchandising

Here are four photos showing terrific attention to detail in a small Halloween themed display in a bookshop I visited earlier this week.

Not only is the display eye-catching, it makes excellent use of a small amount of space and it pit shed products from a range of different categories. In fact, I count six different product categories represented.

This is a smart display, especially for the space it takes. Rather than the old-school big and bold aisle end display newsagents bare still encourage to create, here is a small format display in a tight space. It is a display that represents ts a narrative and this is another reason I think it is smart.

I hope you find it as inspiring as I do.

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Newsagency management

Good looking magazine and newspaper display

I like this wall I saw earlier this week displaying magazines and newspapers together. I like it for the professional look, ease of browsing, how it makes the products the hero that the fixtures are flexible, that it works on any wall to attract shoppers to this location, and the pitching of papers and magazines together.

The placement of small-format titles between papers is smart.

The black fixture makes the magazine covers pop.

I could see a wall like this on the back wall of a newsagency working better than the old style a-frame magazine units that still occupy centre stage of some newsagencies.

Sure, the wall cannot hold as many titles, but with thoughtful placement, a wall four metres wide could work.

While magazines are challenged, they continue to be an important traffic driver for many newsagency businesses. As such, it is important newsagents continue to evolve how the category is ranged and pitched in-store.

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magazines

Selling pens, markers, with optimism

I love this  display I saw at an Office Depot store. The WRITE BRIGHTER headline is brilliant and the range it is promoting fantastic. It is a strong, optimistic, pitch that makes you want to buy, to write brighter. We can learn from this. Our pen and marker suppliers can learn from this. Would I put this display in my shop? For sure! … because it changes the conversation, it pitches pens and markers as an impulse purchase opportunity.

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Newsagency management

Confronting the challenge, making it work

Challenges can stop us or they can motivate to tunnel through, climb over, walk around or somehow overcome. I was inspired by the table out the front of a bookshop I visited yesterday. They are on a steep hill but wanted a table of books out the front of their shop. They made it work.

They overcame the challenge and made it work.

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Newsagency management

Pitching happiness from the shelves

More and more retailers, usually small business or independent retailers, are taking the approach of a curator in selecting items they stock and the in-store placement of these items.

Being a curator is a step beyond being a retailer as you choose items for how they make people feel, and sometimes this is consideration ahead of thinking about sales revenue from the item itself.

In making conscious decisions to stock and display in order to impact the mood and outlook of our customers, we can attract new traffic and drive engagement in-store.

This HAPPINESS PLANNER is a good example. Who doesn’t want to plan for happiness?

There are some excellent suppliers who play well in this space, who have on-trend items we can use to make pitches similar to this one. Retailers need to find their own, with ranges that speak to them. This is what being a curator is about.

In my shops we do it regularly in-store as well and on social media. Customers love it. we love it because of the outlook it projects.

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Newsagency management

Small Sydney gift fair works well

The Retail Quarter, the gift fair in Sydney right now, has been a good fair. I have been there over the weekend. While it was not crazy busy and does not have a large number of suppliers, it is proving to be a good event.

I like that the aisles are not as packed with people. This allows more quality time networking and with exhibitors. That alone improves the business experience of attendees and exhibitors.

The greater homewares focus was something I appreciated.

Looking at the fair as a retailer, I found plenty to buy, and I enjoyed that.

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Gifts

Nothing like AFL Grand Final week to drive newspaper sales

That Richmond is in the AFL Grand Final this coming Saturday is appreciated by all newspaper retailers in Victoria as it is delivering a welcome boost in sales.

Victorians love their AFL football, especially if Victorian teams are in the Grand Final.

Had this been a Greater Western Sydney / Adelaide Crows Grand Final newspaper sales would almost certainly have been down. But it is not, and that is good.

That it is Richmond makes it even better value for us because of their battler status. They are not a rich or strong club like Collingwood, Carlton, Geelong or Hawthorn. Richmond is a local suburban club with roots back to the 1880s. That is at the root of the passion.

Engaged newspaper retailers are supporting Richmond this week to make the most of the supporter opportunity. This is a no-brainer. Posters, colours and other things in-store show an engagement that almost all Victorians will appreciate.

News Corp. is leveraging the opportunity well for newsagents:

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newsagency marketing

Is Bauer considering closing and or replacing the Connections program?

Rumours are dangerous things as they come without firm evidence. Hence, they need to be treated with care.

A rumour put to me over the weekend is that management at Bauer is actively considering closing the Connections newsagent promotional campaign and replacing it with something promoted as better and more relevant to today but which would have a cost to Bauer that is a fraction of what Connections costs today.

The cost of Connections on the Bauer P&L is considerable. Without a satisfactory measureable income benefit it would be understandable the company is looking at either changing, closing or replacing the program.

Remember, the CEO of Bauer last week the magazine distribution sand sale process had to change.

“Magazines and newspapers have a great future, they have a very important social future, but for both newspaper and magazine companies, the model under which they operate doesn’t work anymore.

Changing Connections could be part of that.

As the impact of staff changes is felt through the Bauer company, the known history of Connections diminishes, along with the known history of dealing with the newsagency channel. This will bring the performance numbers of Connections into greater focus.

In my own opinion, it is time for a fresh approach to driving retailer engagement as posters, power end displays and the like are not appropriate for driving incremental purchases of magazines. Just as Bauer is looking to approach magazines differently, newsagents need to as well. This includes how we engage with promotions, where we locate the department and how we leverage other foot traffic to get the magazine add-on.

These are challenging considerations that we need to have in our businesses and in the networks to which we belong where such strategy matters are discussed.

I have not published here everything put to me about Connections as I don’t think the other points in the rumour are relevant to the core question about the future of Connections.

Comparing Connections to the Pacific nexus program, Connections is more one-way whereas nexus has considerable regular activity run by Pacific to drive traffic in-store, activity that is sent under the name of newsagency businesses. The two serve different purposes. The two have served newsagents well.

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magazine distribution

Burn, newspapers

This ad from Sydney University kind of makes fun or mocks newspapers to sell its courses with the headline unlearn truth placed on top of a stack of newspapers.

I noticed it today because of the newspapers in the image. I guess it worked at getting my attention. I say burn as it’s a modern slang term that I think reflects what has been done here.

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Newspapers

Newsagency management tip: how to quit stock quickly

If you want to quit stock, quit it, quickly. Quickly means different things to different people. I think it means 7 days … gone and out of the shop in 7 days from when you decide to quit the products. Of course, this will vary based on your own local circumstances.

The easiest way to quit stock is for your shoppers to understand the deal. Understanding the deal starts with how you brand the sale.

A sign with SALE on it could mean anything. Do NOT use this. There are too many around, each meaning a different thing.

A sign with, say, 50% off could be confusing as they don’t know the starting price and some may not understand percentages.

Sign with HALF PRICE is more easily understood but they still do not know the starting price.

If you really want to quit stock, I suggest you have tables or dump bins at price points: $1, $2, $5 – or that ever is appropriate to you.

I tried a $9.99 priced at 50% off, half price and $5.00. The $5.00 pricing worked the best, by far.

This is my recommendation on quickly quitting stock: get the price messaging right.

If your price messaging is hard to understand or if there are too many different price messages you could be creating a barrier and this could stop you achieving the sales outcome you want.

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Management tip

Newsagency marketing tip: don’t promote competitor businesses

I don’t understand why newsagents share on their Facebook page a post from another newsagent’s Facebook page where they have no commercial or group relationship with the other newsagent.

If you like what they have done and you have the product in your shop too, write about it yourself.

Sharing can be lazy posting. It is okay sometimes, but often not.

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marketing

newsXpress TVC is driving in-store traffic

It has been hard for Foxtel’s 2.2 million subscribers to miss the newsXpress TV commercial running over the last week. Funded by newsXpress and supported with a strong social media campaign as well as in-store marketing, the TV campaign has been successful at driving net new traffic.

Basket data indicate valuable engagement beyond the basic buy 2 get 1 free pitch. Plenty are buying more of the promoted Beanie Boo product. Plenty are buying other products while in-store.

Landing new shoppers in-store is tough work. newsXpress is doing this at a national level for its 243 retail locations and doing it through a product that historically was a toy shop and national retailer product. The campaign is part of a long-term and integrated strategy that has recast the focus of newsXpress to new traffic areas while not disrespecting traditional newsagency shopper traffic.

To those who say the buy 2 get 1 free deal is nothing special – you’re entitled to your view. This is the second year running this promotion for a reason.

To those who may want to mock Beanie Boos, a country town newsagency with a population of 5,000 selling $23,000 in Boos in a year and achieving the best return on floorspace of all products in-store from Beanie Boos is one example of many success stories. In the city and country, Beanie Boo and associated exclusive products are an excellent new new traffic driver product.

To those who want to criticise newsXpress for any reason, that is your right. However, criticise with facts. The facts here are, this campaign is a terrific commercial and new traffic success.

To those who may say not all newsXpress members participated, yes, that is true. I think those who chose to not participate are dills.

To the other marketing groups who say I should not write about newsXpress here, remember, there is an open invitation for you to share your success stories here.

Note: I am a Director of newsXpress.

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marketing

Now is the time to promote the AWW health Diary

Right now, right away, is the time for newsagents to promote the Australian Women’s Weekly Health Diary. This is an ideal title to pitch on social media as well as pitching in-store, in a prominent position where more eyeballs see it than in its usual location.

Toing hard now is vital if you want to win sales that may go to other retailers. Approach this as a speed to market competitive situation.

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magazines

Why is Tatts competing with Lotterywest in Western Australia?

At a recent function, I was sitting next to the new CEO of Lotterywest, talking about Lottoland and the announcement at the function by the Premier, Mark McGowan, to act on Lottoland in WA.

I mentioned that Tatts is also a competitor in WA, allowing online purchases via their website and their app. The Lotterywest CEO was surprised.

I grabbed by phone and in a matter of seconds completed a purchase for that night. She was shocked and commented that Tatts is another competitor Lotterywest must face.

The competition from Tatts felt by Lotterywest is the same competition every retailer must feel. Online must be the main game in town for Tatts. They have no option but to drive online purchases. They are more efficient and more profitable.

It is easier to win a new customer through online.

It is easier to get an online purchase converted to a perpetual subscription.

Online also provides Tatts with a direct to consider relationship. As any manufacturer selling online direct to consumers know, this is the most valuable of relationships.

Driving online is smart business for Tatts and Tatts shareholders.

While newsagents can lobby for Tatts to give them a share in online, I don’t see any way that can happen unless you can get Tatts to agree for you to be able to vend tickets online. Not now. The time for that argument was ten or fifteen years ago.

This is one reason I say there is no upside in lotteries for retailers. Unless you can access online sales yourselves, over the counter will continue to decline for most retailers.

In case you have not seen how easy it is to purchase using the Tatts App, check out this video I made a couple of months ago:

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Competition
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