The report in the Queensland Times newspaper last week talking down the future of newsagency businesses is another reason to promote your business as your business and not as a newsagency. It is important to distance your business from those people connect with stories like this one.
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.
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
The story of the murder of the Lin Family, the owners of a newsagency in Epping in 2012 rocked the channel and brought suppliers and folks then at NANA together to help those left behind, to keep them keep the business running.
The tragedy reached a conclusion this week with the guilty verdict for a family member.
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.
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.
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.
I 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.
The 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.
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.
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 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.
Josh Bornstein has written an insightful piece on the state of newspapers and journalism. It has been published at The New Daily. I recommend into those interested in journalism and the future of news.
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?
I 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.
While 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.
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.
The 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.
Sorry that this is a negative post. However, it is important. there are newsagents and other small business retailers who have lured heaps of money into websites only to have them fail. By fail, I mean, not work, not deliver the additional revenue they sought.
I know a bit about this having run retail related websites for twenty years now – some successful, some not so successful.
Based on my experience and observations, here are the top six reasons small business retailer websites fail:
Business websites, especially e-commerce sites, are hungry beasts. They require considerable up-keep, daily attention. The data must be accurate. The site design needs to look fresh. Think of it as a shop but online. Just as you open your doors to your physical shop and keep it tidy, you need to do the same for your website.
As a rule of thumb, a retail business website needs a major look, feel and functionality overhaul at least every eighteen months. If you don;t do this you are felling behind in a highly competitive space.
Here is my newsagency management tip for today: if you have a business website, feed it, nurture it, keep it current … otherwise, take it down and save the embarrassment.
The engagement from this post noting the passing of Carrie Fisher is a reminder of the importance of approaching social media posts thoughtfully. Consider a post a conversation or an entertainment, and not as an attempt to sell. Selling will lose you followers.
People want to be entertained. They want to feel good. They want you to add value to the few seconds they give you of their life.
Not a cent was spent on this post.
Promote the latest issue of Who magazine well and widely as it is an excellent opportunity to grab impulse purchases. The Carrie Fisher cover with Debbie Reynolds on there and George Michael all make this a collector’s issue.
Suggest it as a gift or a keepsake – broaden the appeal from the magazine itself as a personal purchase.
I am not happy that Coles supermarkets continue to pitch that Inside Out magazine from News Corp Australia was $8.20 and now is $6.00. Beyond making other retailers look expensive for this magazine compared to Coles, there are other issues here that concern me, issues that I think the authorities like the ACCC need to consider.
At $6.00, Inside Out is sold at Coles supermarkets at below the established cost price for the magazine title.
The ACCC website has something to say about selling items at below cost including this:
While selling goods at a below-cost price is usually okay, it may be illegal if it is done for the purpose of eliminating or substantially damaging a competitor. This is known as predatory pricing.
Coles has been offering Inside Out magazine at $6.00, discounted from $8.20, at least since June 2014 when I first wrote about it on this blog.
The ACCC has something to say about two-price comparison advertising including this:
Statements such as ‘Was $150/Now $100’ or ‘$150 Now $100’ are likely to be misleading if products have not been sold at the specified ‘before’ or ‘strike through’ prices in a reasonable period immediately before the sale commences.
Such statements are also likely to be misleading if only a limited proportion of a product’s sales were at the higher price in the period immediately before the sale commences. The volume or proportion of sales that may result in such statements being misleading will depend on the circumstances of each case.
The length of the period will depend on factors such as:
- the type of product or market involved
- the usual frequency of price changes.
If a business has a policy or practice of discounting goods when not on sale and uses two-price advertising in relation to sale periods, there is a significant risk that the use of two-price advertising will involve conduct that is misleading. The business would be representing to consumers that they will make a particular saving if they purchase the item during the sale period, when this is not necessarily the case.
While I am no lawyer, I think it is possible that the Coles Inside Out magazine pitch is what the ACCC would consider to be misleading conduct based on its position on two-price advertising.
I have written to the ACCC this week seeking their consideration of evidence Coles has been running this campaign for two an half years.
The Coles pitch does make other retailers of the title, including newsagents, appear more expensive. I suspect this is what Coles wants.
While newsagents and other high street lottery retailers have the $55 million Powerball jackpot posters out and those with the screens have digital posters showing, it is on phone and online where purchases are being snared, in seconds.
We know from countless studies every year how much online advertising is growing as is online purchases. Such studies often offer comfort to high street retailers saying online searches play a role in in-store purchases. Not so with lottery purchases.
It is so easy. You can have the ticket purchased seconds after seeing the ad.
This is where Tatts and others are winning online sales – as I would hope from them if I was a shareholder.
Two years ago here I said online was the biggest threat confronting newsagents. I think this week we can see how that is playing out.
Yesterday, while reading Huffington Post on my phone, this ad came up:
I clicked on the ad and it took me here:
And here is a post that came up in my Facebook feed last night, a sponsored ad from Tatts:
And here is the OZLotteries online pitch from Facebook:
A couple of seconds later with a few clicks from the ads I could have had a ticket in the $55 million Powerball jackpot on my phone.
In my opinion, online is the biggest threat to in-store purchases as from a consumer perspective it is easy, easy to purchase, faster to purchase, more easily managed than paper tickets and more relevantly engaging with the lottery ticket customer.
Newsagents can’t stop the growth of online purchases.
It is not just Tatts in play online, there is OzLotteries, a Tatts agent, Lottoland and other betting products including lottery products.
And when I talk about online I am really talking about mobile given that some research from Australia last year indicated that more than half of online purchases were made from mobile devices.
If a lottery purchase is an impulse purchase then online wins that game for the reasons outlined above.
I think there are two lines of action newsagents could / should consider:
Being able to sell online will most likely not happen for contractual, management and other reasons so the focus of newsagents and those who represent them should be on the in-store corporate image cost.
Tatts should be reasonable about location in-store, space allocation, the actual fit required and the fees for the digital platform. The cost should drop 50% or more and the digital feed should be free. It should also be more flexible as to what newsagents can pitch with lottery products as that will make being in lotteries more sustainable for small business retailers.
Tatts can’t have it both ways. It can’t be a competitor that blocks other competitors online while forcing the physical store competitor to have a cost base that is not relevant to the changing circumstances of 2017. Online will be a beneficiary of the branding investment by newsagents. Time will tell the extent of the benefit.
Newsagents yet to invest in the new fit need to understand the cost to their business. They should determine how long it will take to earn the cost back. They need to be aware of the challenges of promoting a brand that is clearly migrating to an online model. These are things to contemplate before you spend a cent.
