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

Author: Mark Fletcher

The New York magazine specialist

I got back to the best magazine shop in New York a couple of days ago. This is the only shop of its kind in Manhattan, serving a close population of 1.6 million. take a look from the outside:

Their window displays are nothing special but they do show off their unique range:

This is what you see when you step inside:

Here is what you see immediately to the right inside:

They do it this way because they are truly unique. Their customers want range. They come to them. They don’t have to do displays to promote.

9 likes
magazines

RISE Up is an inspiring program about retail businesses and the good we do

I am grateful for the opportunity to be at the National retail Federation conference in New York this week where they launched RISE Up:

While this is an American program, it speaks to the value of retail in Australia.

The campaign is supported y a number of stories about individuals, like this one:

Telling stories is important in any business but especially in small business retail where our businesses have many stories of local connections and engagements we could share.

I look at the NRF RISE Up campaign as a challenge for us to engage better in our businesses, to tell more of our stories so the broader value of our businesses is understood.

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Newsagency management

The Centrelink pursuit of questionable debt is indicative of a bigger government failure

Centrelink is not the only federal government organisation that engaged is a collect at all costs first investigate later approach when it comes to money. The ATO takes a similar approach.

I know of plenty of small business owners who have been pursued by the ATO as a result of a flawed data matching process.  In one case, a claimed debt of over half a million dollars dropped by 90% once the ATO considered the evidence. Sadly, it took well over a year for the ATO to agree to look at the evidence. In the meantime, irreparable damage was done to the morale of those leading the business.

What we have been eating about Centrelink = the letters they send, their appalling customer service, the inability to contact them, their assumption that threads of data stitched together can present an accurate view – is also true for the ATO.

Somewhere in government the principle of collect at all costs first investigate later must have been set. It is being pursued with vigour.

I heard from a retailer earlier this week who is being pursued for $80,000. They don’t think they owe it, nor does their accountant. Thanks to an address change and resulting lost mail, the newsagent has heard about the issue when the ATO has taken cash from their bank account. Payroll is at risk as are key supplier payments. This business could close because of the action by the ATO.

Politicians who say they care about small business and ordinary Australians need to investigate the systems of government, they need to see why the ATO, Centrelink and maybe others are pursuing their collect at all costs first investigate later approach. Politicians need to consider whether penalising someone prior to a trial is just and fair.

14 likes
Ethics

Is newsagent owned stationery wholesaler Ancol competing with newsagents for back to school?

Ancol, a Co-Operative and owned wholly by South Australian Newsagents, runs Newspower in South Australia, owns KW Wholesale, which supplies stationery direct to schools, and Lighthouse Books & Office Supplies, another business that supplies consumers. Ancol acquired Lighthouse in recent years – it was not a core business for most of Ancol’s history.

What Ancol appears to have become via Lighthouse is a retailer of stationery, competing with the businesses of its shareholders. The Lighthouse website shows some the the schools with which Lighthouse partners:

From what it appears, Lighthouse wins the schools tender to supply stationery to students, then the school directs the parents to go online and purchase through Lighthouse .

Here are some examples of pricing :

  • Glue Stick UHU 40g $3.20
  • Display book Clear front $1.90
  • Calculator Casio FX-82AU Plus11 Scientific $29.95
  • Binder book 96pg exercise $1.40
  • Markers Faber Castell Connectors 10’s $4.62
  • Obviously the school is getting a kick back from Lighthouse Books somewhere along the line , hence the high pricing, however the Newsagent misses out completely

I am curious about what South Australian newsagents think about Ancol directly competing them through Lighthouse?

While it could be argued that success for Lighthouse strengthens Ancol and this benefits newsagents.  Maybe so. But what about newsagents competing for Back to School How would a newsagent feel losing a school parent stationery sale to Lighthouse?

I know from discussions with newsagents across multiple states that Ancol prices to newsagents are considerably higher than elsewhere. Newsagents pay a premium if they buy from Ancol that must flow to retail prices, making those newsagents less competitive.

How would newsagents in the rest of Australia feel in GNS purchased a business like Lighthouse and through it chased school parent booklist purchases?

To see the retail of booklist business pursued by Lighthouse, take a look at part of a booklist for one school.

Newsagents will have to make up their own minds on this. My opinion is that Ancol should have been more transparent about its plans and given newsagents the opportunity to say it should not purchase a business that competes with them.

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Competition

Richard Branson on small business and competition

I am grateful for the opportunity to have heard Sir Richard Branson speak at the National Retail Federation Retail’s Big Show conference in New York today. He talked about small business and the challenge of competition against much bigger competitors.

Over the decades, Brandon’s businesses have taken on plenty of big competitors. In Australia, for example, we first saw this when they enter east the air space with Virgin Australia.

Branson’s key messages for taking on a big competitor are simple. The small business needs to:

  1. Provide better service.
  2. Provide better value – through knowledge and more.
  3. Be closer to the customer.
  4. Move faster.
  5. Have more fun.
  6. share the fun.

These points are not new. However, Branson pitched them with examples of how he did this with success in a range of small businesses with much bigger competitors.

It is easy to too a big competitor and allow their sheer size turn us away from playing to our strengths as a nimble locally engaged small business.

This conference is a big deal on the retail calendar. This year there is in excess of 30,000 attendees at the conference and massive trade show. The topics being covered include high street retail, small business retail, big data, security, online and some excellent outside the border of history opportunities that I will not cover here.

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Newsagency management

Sunday newsagency challenge: be ready for the reps

With supplier businesses back from their Christmas / New Year break there will be a surge in contact from reps over the next two weeks as they are pressured to get orders pumping for 2017. Here are my tips for managing your business ahead of theirs:

  1. Refuse to see anyone who does not have an appointment.
  2. Only make appointments with suppliers you need to order from.
  3. Order primarily based on your sales data.
  4. Order within a budget. Keen capacity in the budget for new suppliers / products.

Suppliers who have been on a break and want to get quick orders in have a problem of their own doing. Don;t let it become your problem.

9 likes
Newsagency management

Sunday newsagency management tip: consider an alternative to using a shop fitter

The days of the bespoke shop fit in retail are a thing of the past with engaged retailers going for a local, more homely, look in-store. This is good news because this type of look can be created for a significantly lower cost than purpose-built fixtures.

Using secondhand materials or easily sourced consumer products, you can create a more appealing and warm feel for your business than the sparkling yet sterile look we see in most new shop-fit stores.

If you want your business to have its own identity and not look like an old-school newsagent, that starts with the fit.

The photo is from a card and gift shop that is transforming from the old purpose build fixtures to these readily available, warm-looking, fixtures. It is a terrific look, far more appealing.

8 likes
Management tip

Gift supplier StyleSetter to close

StyleSetter International, a mainstay in the gift space for around five decades is to close in a couple of months.

Barry and the team have been transparent with retailers and provided good lead time to get final orders placed. Their approach is classy and respectful.

Just as newsagency businesses are challenged by changes in retail, so are suppliers. There are other suppliers in our channel confronting questions about the future. Hopefully they will be as up front as StyleSetter.

1 likes
Newsagency challenges

GNS to acquire WA Stationery

GNS announced yesterday the decision to acquire the WA Stationery business:

Hi there,

I’m writing to you this morning to let you know that GNS Wholesale has agreed to acquire WA Stationery Wholesalers (“WAS”) from its owner, Rik Thornton. As part of the agreement, effective 1 February 2017, GNS will combine its WA-based operations with those of WAS. Our goal is to guarantee the future strength and reliability of the wholesale supply chain in the stationery and office products market in WA.

Working closely with the current management of WAS, GNS intends to combine the best of the two businesses to deliver a stronger product and service offering to customers, build business scale and generate cost efficiencies.

We value our relationship with you highly and I’d like to personally thank you for your ongoing support of GNS.

Further details are in the press release attached, and we will keep you closely informed as we progress. Do feel free to contact me or any of the team if you have any questions.

All the best,

Paul Yardley
CEO

5 likes
Stationery

How one newsagent could harm the whole channel

There is a newsagent who is selling on eBay selected magazine titles for which they have claimed credits. I am told they have been doing this for well over a year.

I hope they lose their direct supply account as a result. This behaviour does not deserve a second chance.

Every newsagency business owes an obligation to all newsagency businesses to act ethically, to honour their supplier contracts.

32 likes
Ethics

Lottoland celebrates their first birthday in Australia

Lottoland sent an email yesterday celebrating their first birthday in Australia. The only indication of numbers is:

You and hundreds of thousands of other Aussies registered for their chance at the record-breaking $2.1 billion dollar US Power jackpot.

Registering is free so the stat is no real insight into their success. That said, I suspect their ad campaign attacking newsagents is hurting our channel, as appears to be their intent.

1 likes
Competition

Read about the business that represents a big threat to newsagents

Typo is an extraordinary business. Yet it defies description.  Is it a gift shop? A stationery shop? Who knows?? However, Typo is popular because of the design of its products.

The Age two days published a terrific article that takes you behind the scenes of the company behind Typo. I urge all newsagents to read the article.

“We really believe in developing product that people love, that they can afford,” he says. “Not the cheapest, not the most expensive but always on trend, that’s our place.

The article is an excellent read.

I have written about Typo here before. My view remains that Typo is a major threat to newsagency businesses. They have made stationery fun and chic for a demographic hitherto ignored in our channel.

I urge newsagents to go to a Typo store and prop outside for an hour or so and watch how people engage with the store and what it sells.  While I have seen plenty of Typo stores, the one on the mall in Brisbane is the best for this type of watching.

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Stationery

That’s Life Australia Day promotion opportunity for newsagents

image001-1I love the Australia Day promotion with That’s Life from the issue on-sale next week for Pacific Magazines’ Nexus program newsagents. The tea towel is a simple and ideal gift to pitch with this title and for the season. From this weekend on newsagents in Nexus should be promoting the opportunity. I say from this weekend on because of the sales decay for weeklies – 75% of all purchases are in the first two days. So, promoting next week’s issue from Saturday should not hurt this week’s issue.

5 likes
magazines

Newsagents on the front page of the the Queensland Times newspaper

Screen Shot 2017-01-11 at 12.42.34 PMThe Queensland Times out today has the future of newsagents being questioned in an article on the front page of the paper. While the article quotes me from what I have written at this blog. I was not contacted prior to publication, which is frustrating as the article lacks context.

Had the journalist spoken to me before writing the article, I would have pointed them to several of the many posts, including recent posts, where I talk about the future optimistically.

Sure, the Tatts demands placed on newsagents are challenging. I have written about them here extensively. However, there is plenty of good news in the channel, plenty of newsagents growing their businesses.

Any article writing about challenges faced by newsagents needs to have balance, this is what I mean by context.

In terms of the Tatts refit demands, I’d like Tatts to provide evidence of the return newsagents will get from the refit and the increased operating costs of the digital screens. Then, I would like Tatts to engage in mediated dialogue with newsagents to seek a fairer cost basis for the demanded refits. The demanded capital cost needs to be funded from margin faster than is currently anticipated.

I appreciate the time Kelly Higgins-Devive gave to this issue in an interview with me today on ABC radio Brisbane. The producer of Mornings on ABC Radio Brisbane called me to seek an interview. They told me they wanted to speak with newsagents but those they spoke with did not want to go on air for fear of reprisals.

Click here to hear the program. I was on air at around 9:20am so listen at around that time.

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Newsagency management

The online strategy helping newsagents win sales locally and interstate

Last year, newsXpress launched an integrated online strategy through multiple websites that are directly connected back to newsxpress businesses and promoted on Facebook and other social media platforms. The websites are also structured to appear high on Google and other rankings.

The websites are brand-focussed. That is, they promote the brand of the products ahead of the business name, as this is what people search for online.

The strategy was developed based on comprehensive research.

The result has been extraordinary. Each of the websites is generating new foot traffic in-store as well as online sales. People use the sites to find local stores with stock as well as to purchase online.

Daily, there are excellent sales where the goods are being shipped interstate to people who would otherwise have never purchased from the participating retailer.

While this is a newsXpress initiative for newsXpress members, the project demonstrates what is possible for locally owned tech-connected small business retailers. It proves  small business newsagents can be data compliant and they can be tech-enabled in a world class way.

I make this point about compliance and being tech-enabled as too often suppliers to the channel say newsagents are not compliant and not tech-enabled. My argument to them over the years has been give newsagents a commercial reason.

This integrated online strategy provides a compelling reason, and it works.

In one case, a newsagency located ten hours by road from the nearest capital city did more than $5,000 in sales online is a few weeks, to people who have never been to the shop and will never visit the shop, without spending a cent on extra stop, with 100% of freight costs covered, delivering bonus bottom line profit. This in a town challenged economically.

How 1,100 new customers found local newsXpress stores.

Over the last six weeks, more than 1,100 new customers purchased online from local newsXpress stores, spending tens of thousands of dollars. Already, some have been back to make more purchases.

In many cases, the new customers are interstate from the newsXpress store that fulfilled the order.

Half of the purchases were made when the shops were closed.

Customers happily paid packing and shipping costs.

People purchased to have goods delivered to them, delivered as a gift for someone else or to be held in-store for them to pick up.

This e-commerce strategy from newsXpress offers a genuine omnichannel retail experience.

newsXpress has five websites attracting new shoppers for newsXpress members. The group will launch more in 2016. The online sale process for newsXpress members is easy, structured and certain.

Here is what four of our newsXpress members have to say:

  • The online strategy from newsXpress is amazing. I am shocked at how many sales I am getting for my suburban Melbourne shop. People are buying from us from all over Australia. And plenty of local people are finding out about our shop from the website too. This has changed my business. Katherine Yeunh, newsXpress Brandon Park (VIC).
  • We are thrilled to win thousands of dollars of sales to people who live interstate. The newsXpress online strategy is helping us find new customers and increase the value of our regional Victoria based newsagency. David Brakey. newsXpress Bairnsdale (VIC).
  • I have just sent off a $192.88 value order from my country town newsXpress business to Kew in Victoria. This online strategy is helping my small business find new customers I could never have found by myself. I love how easy this is working for me. Paige Noonan. newsXpress Minlaton (SA).
  • Wow! The newsXpress online strategy has been an extraordinary boost to my business in regional Queensland. New sales every day to people who live interstate. But better still the website more locals find us. This is a winner for us. Narelle Cooper. newsXpress Walkerston (QLD).

The newsXpress online strategy is leading edge. There is nothing like it in Australia. The strategy links newsXpress stores, real time, to online sites that are at the top of Google searches. Through this newsXpress is putting newsXpress businesses from all over Australia in front of as many eyeballs as the big end of town.

Footnote: I am a Director of newsXpress Pty Ltd.

25 likes
Leadership

Changes in summer holiday retail traffic in Australia

I have noticed a difference in shopper traffic in major centres in Melbourne this summer. Immediately after Christmas there was less traffic than usual and a week later there was more traffic than usual. Talking to some other newsagents they mentioned similar traffic changes in their businesses.

This post is an opportunity for others to comment about summer traffic. Is it up or down for you?

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retail

Chocolate and sudoku – an opportunity for newsagents

IMG_2578I like the tasty look of the latest issue of Super Sudoku from Lovatts. It does not look like your usual sudoku title.

We have pitched this issue of Super Sudoku on social media to leverage the chocolate connection. In the crossword section we have it as the hero title – leveraging in-store the different look.

I don’t often promote magazines on social media but this pitch is different enough to warrant it.

4 likes
magazines

Make the most of the Australian Open

IMG_2581While sales are not as strong as they used to be, the official program for The Australian Open remains an important title fixture for newsagents. This is a perfect title to pitch on your business Facebook page as being available in-store. In terms of placement, be sure to have it with newspapers and at the counter. This dual placement, in these specific locations, will help maximise the opportunity. My experience over years is this week is the best for sales of this title in Melbourne.

2 likes
magazines

The back to school price challenge of the 5 cent 48 page exercise book

I got out of doing back to school around ten years ago, because there was no evidence of it being profitable for my suburban Melbourne newsagency.

Sure, revenue was good. Margin was trimmed to the bone. People bought on price. They were not loyal through the year. So I got out of it.

I talked to people at GNS at the time and disagreed with them on the value of the season, that the traffic generated returns through the year. It’s like the theory of trickle down economics – nice to hear but not reflective of what really happens.

Screen Shot 2017-01-08 at 9.33.19 PMThe current Officeworks catalogue is reminder of the challenge of back to school in the open buy space – where you chase business from walk-in shoppers without a specific school endorsement. The page 1 hero product is the 48 page exercise book, priced at 5 cents. This is the cheapest price I can find by far for this. Further in the catalogue are more compelling deals newsagents in this space will be frustrated with.

I can understand parents being price conscious, especially when a comparable product from a local small business retailer is as much as five or ten times the price. The Officeworks advertising on price pays off especially at this time of the year.

But back to school is not lost for the newsagency channel.

I know of many newsagents who do well from back to school. They either have strong local school support, contracts with local schools based on booklists or are located in regional situations.

In capital city suburban situations, newsagents doing well from walk-in (as opposed to the more structured booklist) back to school business is rarer today than a few years ago – thanks to the loss leader pricing of Officeworks and the tremendous competition from K-Mart and similar.

In my own shopping centre based businesses this time of the year while we have stationery, we prefer to focus on other seasonal opportunities.  Calendars remain strong as are diaries.  Plus, we have another non-traditional season built around full margin product that works a treat in January.

GP is the key for me. We must maintain above a percentage goal for the numbers of the business to work. Gone are the days of years ago of thinking that selling cheap today will drive loyalty and pay for the discount with revenue volume over time.

30 likes
Competition
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