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

Author: Mark Fletcher

Old-school newspaper publisher subscription obsession misses revenue opportunities

While I have no newspaper publishing experience, I am a consumer of news, especially on my phone, tablet and laptop.

But I don’t pay for it, I won’t pay for it. If there is a story behind a paywall that interests I wait or seek it out elsewhere – not because I am cheap but because the publisher wants me to sign up to a subscription.

The subscription model is an old media approach to a new media opportunity. It is out of date and not suited to today’s online and mobile consumer.

Screen Shot 2016-09-21 at 6.26.53 PMWhile in the UK earlier this week the Herald Sun had a story about the back room moves at Richmond Football Club. I clicked on the story and got this screen.

They wanted $10 for two months access before they would let me see the story. I love a good AFL back room story but it is not worth paying $10 to access it. That is how I saw it, a $10 fee because of this one story.

I suspect that is how plenty of people see it, especially those of us who travel overseas and want to catch up on stories back home for a short while.

Had the offer been, say, a fee for the story I would have been more interested. How much I’d pay would depend on the story. In this case, I might have paid up to 25 cents.

How much I would pay for future Herald Sun stories would depend on the trust that builds from earlier purchases. If the value is there I’d pay a few cents per article.

Imagine what would happen if publishers adopted this pay per story model. It would make the stories the thing rather than the current obsession with clickbait headlines. It would make journalism the thing as the better the journalism the better the value of the story and the more consumers would respect a masthead and the more stories they would buy. Hey they might even subscribe.

Today’s digital world is often about either free or low cost access to services and products. This is where newspaper publishers ought focus their attention – micro payments per story. The old subscription model is as old as the old paper model and ought to be discarded as the entry point for digital revenue.

Rather than pushing to lock people into long-term subscriptions, yes, two months is long-term, give is story by story access, take micro payments and get more value from each good story you publish.

This approach of a payment per story makes the journalists and editors more connected to the business model. It would make them work harder to develop content people want as they would want to be in the top grossing stories from the masthead.

I’d like to see News Corp. or Fairfax offer this pay per story approach today. I think a trial with fair pricing would produce a good result for them, their editorial staff and their advertisers. yes, I’d accept non intrusive advertising with any sort I purchase.

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newsagency of the future

The future of newspaper distribution and distribution newsagency businesses

You only have to look at the pitch from News Corp. to understand where they are focused for their future distribution channel.

Screen Shot 2016-09-21 at 6.27.02 PM

The tablet is the distribution mechanism. It is faster, cheaper, more accurate in placement and more current than the current method of printing, stacking, putting in a truck, driving to the distribution newsagent, them unbundling, rolling, loading the delivery vehicle and going out on the road to deliver news that is hours out of date.

These are the facts.

Newsagents need to invest in distribution knowing the focus of publishers. Yes, there is enjoyment from turning the page, not needing a device to read the news and being able to easily dive into a section you like. The thing is, the distribution platform is no longer commercially viable.

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newsagency of the future

Fascinating Sydney Gift Fair

The September Reed Gift Fair in Sydney was fascinating on a range of fronts.

  • A greater diversity of retailers attended. This is no longer a gift fair.
  • A greater diversity of suppliers – if you looked hard enough.
  • Plenty of newsagents were only talking about side what has been traditional for their businesses.
  • Just about every retailer was optimistic.
  • Suppliers were optimistic.
  • Suppliers happily talked to newsagents and didn’t say: I’ve got the perfect product for newsagents … when they say this the product is not usually perfect for newsagents.

It was a terrific fair, important at this time of the year for making sure you have what you need for the next few months without the craziness of the larger fairs.

The biggest takeaway was the focus on change by the retailers I spoke with. Most retailers, from various channels, were focused on change in their businesses. Newsagents are not alone with the challenges of disruption in the channel. I got a lot from listening to, for example, the challenges faced by a jeweller or the challenges faced by a specialty garden gift shop being challenged by a new mass-market retailer coming to town.

One thing I didn’t like at the gift fair is the cheap China junk some wholesalers carry. I saw some dreadful products that mimic more expensive lines, products would retail at under $10. They look cheap. They give off a message in retail I’d not want for my shop.

We in our newsagency channel often see what has been and is happening to us as unique to us when it is not. Small business retailers in many channels face similar.

The key from the gift fair is how you face into the challenges.

Getting out of your shop and looking for opportunities beyond what is usual for your business is a good start. That is where trade shows like this are important.

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newsagency of the future

Lego at Officeworks

IMG_2639 (1)While independent toy retailers including newsagents struggle to get the Lego products they want, Officeworks has a range of Lego stationery. I saw it in the Sydney CBD store, at the front of the business in prime location. This range wold be ideal in newsagencies.

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Newsagency challenges

Ten ways you can save money in your retail businesses that too many retailers ignore

Saving money is something all small business owners want to achieve, when it suits them, to make the business more profitable.

When it suits them is the key phrase. I don’t want to sound bratty but I often see situations where the retailer, maybe a newsagent, maybe not, chooses to ignore a money saving opportunity because it does not suit them.

The thing is, money saving opportunities need to be embraced without the qualification of it suiting. I get that some money saving opportunities have personal implications. However, if saving money matters, these personal implications will be parked.

Here are ten money saving ideas for any retail business:

  1. Buy better. One of the biggest overheads for a retail business after rent and labour is underperforming and dead stock. Buy better. It is easy yet often ignored because it is seen to be hard work. It’s not.
  2. Stop buying what you like.
  3. ‘Do not buy just because you like the rep. The numbers must work.
  4. Stop sponsorships of local groups that do not benefit the business.
  5. Stop advertising in the local paper unless you have measured success as a direct result from the advertising.
  6. Cut the roster based on the commercial needs of the business rather than keeping people on to maintain friendships.
  7. Don’t use a shopfitter. Next time you refit or even partially refit, use off the shelf materials and save money.
  8. Look at your hours. If you are not making money early or late in the day why be open.
  9. Cut with tradition. Traditional decisions often see a specialty retail business, like a newsagency, hang on to products and services to be true to the shingle, long after they made money. Break with tradition and cut these loss making activities.
  10. Stop suppliers ordering for you. Their need may not match your need. Use your technology to order and you should see a reduction in inventory investment by 10% or more. That is cash freed up for you.

If you are in a business where every cent counts, look carefully at this and go further, make your own. The best opportunity to cut costs is when the business is open. Once you have gone under or walked away it is too late.

Management decisions in retail need to be data driven. 100%. Take away the emotion, friendships and other non data related factors. Savings should follow.

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Management tip

Oxford Street Newsagency location still empty a year on

Taylor Square Newsagency closed a year ago. The shop remains vacant today. I wonder if the landlord now wishes they had taken a different approach to rent negotiation for an empty shop is an expensive investment to carry.

When I drove past earlier this week I was keen to see what retail was now in the place. Under the Newsagency shingle is an empty shop.

Landlords need to understand the occupancy cost benchmark for newsagents and similar businesses: 11% of turnover where turnover only includes agency commission and not total sales.

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retail leases

The contradiction of a retailer worrying about $100 a month extra in eftpos fees when running a roster bloated by $500 a month

Some management issues get more attention than others in any business, especially in small business retail like a newsagency.

I guess it is the low hanging fruit philosophy – complain about and deal with the issues that are easier to reach an deal with rather than those out of easy reach.

The thing is, sometimes the pay-off is better for the more challenging issues to resolve.

Take eftpos fees. Newsagents love to bash their eftpos provider and will change in a heartbeat for what appears to be a cheaper fee. They see the move as an easy win.

Comments on this blog reflect the level of interest in eftpos fees. It is considerable.

Now think about the employee roster and the labour costs in your business. Again, comments here reflect the interest in this topic. It is minimal.

Trimming the roster can provide many times more savings to the business than switching eftpos provider yet many newsagents are reluctant to make any such move.

You either want to manage the business for lower overheads or not. The roster accounts for between 9% and 11% of operating costs yet it is usually only reluctantly considered.

Why is that? Why switch eftpos providers to save less than you could save by overhauling the roster?

I think the challenges with roster trimming are that it is personal – you are friends with employees and, it can affect your lifestyle as you might have to work more hours. 

The question has to come down to the motivation for any business decision. If it is about achieving a lower overhead for the business, then pursue that through the whole business and not just one part that makes you angry, such as eftpos fees. Be serious about your goal and reach for further away fruit that may provide you a better financial return.

I know of several retailers who have recently focused on eftpos fees to save around $100 a month while running a bloated roster that could be trimmed by between $6,000 and $25,000 a year.

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Newsagency management

Hubbed partners with 7-Eleven

Hubbed has a stand at the Sydney Gift Fair where they are having out a brochure pitching retail outlets. The newsagent N is on the flyer on the same line as the 7-Eleven logo. The ANF has a stand at the trade show too, with no obvious mention of Hubbed. The ANF did at one stage have a financial interest in the Hubbed business – when they endorsed it and launched it to newsagents.

Also at this Gift Fair, Australia Post has a stand offering services to online retailers. This is not their first outing at a gift fair. What is different this time is their engagement with suppliers – they have visited each stand in a proactive move.

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Hubbed

NSW newsagents expressing concerns about the future of GNS

I have been in Sydney since Friday for the Reed Gift Fair and through the course of the weekend have spoken with plenty of newsagents. Several asked me what I thought would happen with GNS.

I have no insights and was interested in their views. Each expresses grave concerns for the future of the business.

One newsagent told me they could not even purchase a third of what they needed in a visit last week. Another said they have stopped buying because of supply inconsistencies.

These and other comments were from newsagents raising the issue. They were not prompted.  GNS leadership needs to communicate more with newsagents if they want tor stain their business.

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Leadership

Retailer fined for misleading advertising on discounts

Shirt retailer Charles Tyrwhitt was fined $10,800 by the ACCC for advertising was / is pricing when the shirts were never sold for the was price. The Age has the story.

This is an important story as the obligations on retailers when it comes to price claims is clear. The ACCC website offers excellent guidelines on this specific topic:

Two-price comparison advertising
Businesses often make comparisons between product prices being charged and:

  • the company’s previous pricing (including ‘was/now’ or ‘strike through’ pricing or by specifying a particular dollar amount or percentage saving)
  • the ‘cost’ or wholesale price
  • the competitor’s price
  • the recommended retail price (RRP).

Businesses that use such statements must ensure that consumers are not misled about the savings that may be achieved.

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.

Similar considerations apply to the specification of dollar amount or percentage savings such as 60% off.

I mention this today as I know of businesses that use was / is and discount pricing when the price promoted is the only price the goods have ever been sold for. As the story in The Age shows, you don’t want to be caught misbehaving as the financial penalty is considerable.

In our channel there are risks in the ink space particular.

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Management tip

Sunday newsagency management tip: do this if your year on year sales are down

If your year-on-year sales are not down in your business, this advice is not for you.

If your year-on-year sales are down, something has to change if you want to turn the situation around, please read on.

If you keep doing what you have been doing, the sales results in your business will be what they have been.

It would be a mistake to think that external factors are the sole reason your sales are down.

So, change is necessary – change in what you sell, how you merchandise and how you promote.

It is only from change that the sales decline could be arrested and reversed.

Look for u-turn or right turn opportunities, changes you can implement to divert you from your current path.

This is the only step you can take to reverse the situation: turning away from what you have been doing as you know how that will end … the destination is in your own numbers.

FOOTNOTE: For what it is worth, I think this advice is among the most important I have ever published on this blog and, mist likely, among the least that will be followed.

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Management tip

Sunday newsagency marketing tip: bring Spring into the shop

IMG_2616It is Spring, time to celebrate the end of Winter and there is no better way to visually do this than with a colourful display of artificial flowers in the business. This type of display, seen from outside the business, ia perfect marketing activity. Promote the display on social media too and invite customers to share photos of their garden.

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marketing

Good security camera coverage in the newsagency

IMG_2744I was in a Sydney newsagency yesterday with 16 cameras monitoring the shop and a screen at the counter for watching.

The other, and probably more important, benefit of the screen is to show customers the store is monitored.

The more a person thinks they are likely to be caught the less likely they are to steal from a business (or home). St least that is what police have told me. hence the value of the screen at the counter showing the live feeds from the sixteen cameras.

With camera systems costing far less today than a few years ago, they more quickly pay for themselves as deterrents with this type of counter placement of the screen and with obvious placement of cameras in-store.

With theft costing between 3% and 5% of product revenue, investing in a deterrent is important, it provides a good return.

A side benefit of good camera coverage of the store is the ability to watch shopper traffic and learn from their interaction with displays. I find it particularly useful to fast-forward through footage to learn from customer actions in the business. The insights are valuable.

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Newsagency management

Newsagent suppliers: is poor technology hurting your sales?

Newsagents prefer to deal with efficient suppliers who make doing business easy. Doing business easy starts with a good website. A good supplier website needs:

  1. The ability to order and reorder online, easily and with certainty of stock availability and certainty of when the goods will be shipped.
  2. An easily navigated product catalogue. Navigated by category, brand, licence and keyword. With multiple photos for items as appropriate.
  3. The ability to preorder based on shipments expected into the warehouse.
  4. Transparency at the time of ordering of the actual price to be billed and appropriate freight.
  5. An emailed confirmation of the order along with a CSV file ready for importing.
  6. Confirmation when the order has shipped – with shipment occurring within one working day of the placement of the order.
  7. The provision of a tracking number and weblink for the store to track the location of the shipment.

There will be some suppliers who will say this is too complex. I don’t think it is.

I know of newsagent suppliers who are losing newsagent business because their tech interface is out of  date and unhelpful to the retailers they wish to supply.

As newsagents have become more tech engaged it only natural they expect their suppliers to be up to speed.

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Newsagency management

New Lottoland ad continues the sledge against small business newsagents

Here is the new ad from Lottoland. It continues to sledge and mock newsagents. I suspect they are doing this because small business newsagents are easy targets for them. This ad and their earlier ad could help Tatts by migrating people from in-store purchase to online. Tatts could benefit from this migration whereas small business newsagents do not.

From what I can see, those who claim to support newsagents are quiet about what to me looks like an attack by Lottoland.

Where is Tatts in this battle? If they really cared about their retail network they should be out there, on TV, supporting the network. Instead, their main engagement at the moment is the demand their retailers spend between $25,000 and $35,000 on in-store infrastructure without a plan on how this will help in combating this new competitor.

As I noted here earlier this week, the Lottoland product offer is compelling. It is their attack ads I find offensive to small business newsagents.

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Ethics

Price gun offer at Officeworks

IMG_2643I’ve not bought a price gun for years so this may not be a good deal. At an Officeworks in Sydney this week I noticed this price gun being pitched near the sales counter – $64.95 for the Quik Stik gun and labels. I can’t recall seeing a piece gun on display at Officeworks before.

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Newsagency management

Tyro – small business focussed banking

I spent yesterday at Tyro in Sydney hearing about small business focussed innovations in the banking and EFTPOS areas. Yesterday’s session to POS software companies was the culmination in months of work by Tyro on new products. I am grateful to Tyro for the opportunities to discuss these products as they were being developed over the months, leading up to yesterday.

The Xero integration is particularly beneficial as it eliminated double handling, saving time and cutting mistakes.

At the heart of the Xero integration is the Tyro smart account. The terms associated with this account are better what small businesses usually see from the major banks. This account also facilitates quickly approved unsecured financing for small businesses. I think this will interest newsagents evolving their businesses.

Here is a video released yesterday sipping through the Xero integration.

Just in case you think this post is an ad, it is not as what I have written about is available to any of the Tyro POS software partners and the Xero interface is available to any of the Xero partners.

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Newsagency management

Typo teaches us a thing or two about discounting

Typo hit Twitter just now promoting a 40% store wide discount at their Chadstone, Melbourne, store today.

Screen Shot 2016-09-15 at 8.08.07 AM

This tweet teaches us several things:

  1. Be bold. 40% is a good discount. Too often retailers start small and don’t get the traction they need.
  2. Make it each. The Typo store wide approach is easily understood.
  3. Promote on social media. It is free and outside your four walls.
  4. Set boundaries. The Typo discount is off full priced merchandise. This precludes the Typo 3 for offers they have throughout their shops.
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marketing

This magazine competition winner loves magazines

Pacific Magazines  flew the customer who won their recent promotion, Win up to $150,000, to Sydney to enjoy some time in the city and have the chance to win up to $150,000.

The folks at Pacific shared this report of the experience and provided a video that is well worth watching for the insights it provides.

Our winner Fiona purchased her magazines and Optus rechargers from newsXpress Darra and Nextra Forrest Lakes in Queensland.    Below is the video Hans created that shares the excitement of the draw at our Pacific Magazines office.    It would great if you can share this on the blog,  as it demonstrates one customers love of magazines,  their local newsagent and also the opportunity to engage with the magazine brand.

This is a terrific video. I hope we get to see more videos of engagement like this supporting magazines.

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magazines
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