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

Author: Mark Fletcher

The Examiner is better value that The Age on weekdays

IMG_2161In a comparison of news content and pages, the $1.60 I spent on The Examiner in Launceston yesterday is better value than the 60% more for The Age.

Comparing the two newspapers yesterday, page by page, from a local consumer perspective The Examiner is the better newspaper in my opinion – but the value at $1.60 is questionable … I don’t spend the money and we can see from circulation data fewer people do.

The challenge is falling ad revenue for papers is causing cost cutting and this is resulting in thinner papers, fluff filled papers. Ad revenue is falling because news is old by the time it is printed. For a print product to be purchased it has to have value.

Based on news and analysis consumption trends today, sufficient value is not there a print delivery seven, six or even fixe days a week. Except for a locally focussed product. I suspect newspapers like The Examiner have a better chance at a longer print life because of their local focus. The key is to find more ways to fund expensive local journalism.

4 likes
Media disruption

John Oliver on the importance of professional journalism

John Oliver passionately explains the importance of journalism in a democracy and explains the risks for democracy as print newspapers close for digital editions. You’ll need to use a VPN to place yourself in the US to get access to this as access to geo-blocked: https://www.youtube.com/watch?v=bq2_wSsDwkQ I have watched the whole thing and found it most compelling.

The video includes excellent fact-based graphics to explain the situation.

Screen Shot 2016-08-24 at 8.24.22 AM

8 likes
Media disruption

Has the popularity of the AFL licence fallen?

IMG_2140Several newsagents have commented to me that revenue from AFL cards is down this year on last year. While decline in AFL licence product revenue this could be a function of the number of outlets with the cards, it could also have to do with other retailers offering them.

I have noticed the AFL collector cards in every petrol outlet I have been in recent months as well as in c-stores. It feels like they are in more locations than in the past.

But maybe AFL products are not as popular as they used to be. Coles appears to be having trouble selling its AFL licenced micro figures and other items in the stand showing in the photo I took a couple of days ago. They now have AFL licenced product at the front of the store, discounted – and not only in this store.

The goal with licenced products is to get in and get out while the licence is hot. Products selling quickly is important for collectors too. That so much stock appears to be left with Coles is not a good look. But the Coles problem could be to to with this specific range.

In ym own case, AFL products have done well – the Hallmark wrist bands and team song buttons and cards. Plus the Korimco AFL range, especially the team mascots. So I suspect overall interest in AFL licenced product is strong and that challenges relate either to the supply money (the collector cards) or the product (the micro figures).

Regardless of the reason, what I see happening in the marketplace will make me more conservative about plans for next year.

Gordon and Gotch will need to allow newsagents to be specific in placing product requirements as the scale out model does not work in this changing marketplace, especially when return costs are so high for this specific product. Gotch could do this easily if they had reasonable technology in place. As things stand today, they don’t – their newsagent facing technology is appalling, damning small business newsagents to a ridiculous waste of time in managing inventory from Gotch.

5 likes
Newsagency challenges

GNS announces cessation of cash and carry business

GNS today announced to newsagents the cessation of its cash and carry business. As I covered here in a comprehensive piece recently, this is one of several important changes the business needs to urgently make to remain relevant.

Here is today’s announcement:

Over the past few months, we at GNS have been constantly reviewing our business model with respect to our service capacity and processing efficiency around the Cash & Carry service. Mid last financial year, GNS successfully implemented a transition of service change from Cash & Carry to a formal ‘Pick Up & Pay’  service in our Perth operation centre. This service protected the C&C price for customers, but made way for important warehouse logistics changes to better drive efficiencies.

Whilst the Cash & Carry model has been effective in the past, its relevance and efficiency has declined as the market has declined, hence calling for significant change in order to allow GNS to continue providing a compelling value proposition and true wholesaler benefits to our market.

Consequently, after months of further analysis and review, GNS would like to formally advise our customers that the current Cash & Carry service in Sydney, Melbourne and Brisbane will cease on the 18th September 2016 and be replaced by a formal ‘Pick Up & Pay’ service. In the coming weeks, we will provide further information around the changes and important aspects of the procedures to facilitate the transition. We will also be arranging a final Cash & Carry warehouse clearance sale in all eastern states on the weekend of the 17th and 18th September, so stay tuned for more details.

This service transition will enable the commencement of important logistic changes over the next 12 months, that will improve our main pick-and-deliver service, which makes up the majority of our wholesale activity. These changes include:

  • The introduction of a new warehouse inventory management system which will include warehouse relays based on product movement, automated receiving on PDA to improve inventory flow for sale of goods, PDA stocktakes to increase the volume of inventory verification checking, and pick location scanning and PDA replenishment to improve processing accuracy.
  • Implementation of a customer showroom that provides support in the way of product knowledge, sales opportunities and a meeting place for industry benchmarking.
  • Commencement of system centralisation to establish a national approach to our customer account management, WMS system processes and central customer reporting, such as consolidated national customer statements.

We understand that for some customers, a transition from Cash & Carry to ‘Pick Up & Pay’ can be uncomfortable. This is not a small undertaking and this level of change is not easy, but it is absolutely necessary for our business if we are to stay focused on building and improving our service.

In the coming months, you will start to see these key tasks kick-off. As part of the project, we’re committed to keeping you informed and involved as we implement these improvements. We will provide regular communication to ensure you know what’s going on.

7 likes
Newsagency challenges

Small business retailers win on ethical employment compared to big business

Small business retailers including small business newsagents could leverage the negative press about Coles having underpaid its workers and the 7-Eleven scandal of employee underpayment.

These recent scandals are examples of big businesses behaving badly for they represent institutionalised behaviour designed to treat employees unfairly.

While not all big businesses are the same, Coles and 7-Eleven have high profiles, they would be considered respected brands by Australians. The scandals ought to negatively affect the performance of their retail outlets. However, their size and ad spend enables them to trade on without impact.

I think we in small business have an opportunity to speak about the systematic poor treatment of employees by any big business caught. We should say shame on them and remind our community that in small business it is more personal with employees closer to the boss and more empowered and able to address any pay anomaly.

When someone buys a magazine from a newsagent rather than a 7-Eleven the customer can have more certainty about the employee terms, the fairness of pay and that the newsagent is not engaged in a roster con that sees employees paid half or less than the law requires.

Sure any campaign or comment would neb negative. that is because 7-Eleven and Coles have acted negatively, unfairly, to their employees as the media and other reports have revealed. Their actions ought to have a significant cost to their businesses. We can help share our stories, comparing these stories to what it would have been like at Coles and 7-Eleven. We can do this to uphold small business retailers as good employers.

While it is possible there are unethical small business employers out there, their size means they can do less damage than a big business with a work force in the thousands or tens of thousands.

7-Eleven promotes their $1 barista coffee and Coles promotes that their prices are down. One way to cut prices is costs. Labour represents the first or second highest operating cost in a business. Underpay your staff and you can offer cheaper prices. It stands to reason.

In my opinion small business retailers should talk about the issues more, making the most of the bad behaviour of Coles and 7-Eleven.

11 likes
Ethics

A tough day at the office for Pacific Magazines as some magazines cease print editions

Pacific Magazines has today announced the closure of Your Garden magazine, the move to digital only for Bride to Be and Practical Parenting and the end of the licence for Prevention, which will see Pacific bring to an end its publishing of the title.

These are tough decisions, affecting the lives of many. Pacific is not alone in adjusting its magazine publishing business in response to market conditions.

Here is the announcement from the company.

Screen Shot 2016-08-22 at 1.42.11 PM

This announcement is a reminder to newsagents to ensure they are developing sustainable traffic drivers for their businesses as the disruption to print is not only affecting publishers.

4 likes
magazines

Why are governments handing taxi drivers compensation for deregulation?

I was shocked to hear the number $800 million bandied about on radio in Melbourne Friday as the amount that may be paid to Victorian taxi drivers in return for deregulation in the face of competition from Uber. Any amount paid to taxi drivers is wrong in my view.

Then, I discovered the $20K reportedly paid to NSW taxi drivers and the $100M transition package for Queensland taxi drivers.

It reminded me of the hundreds of millions of dollars a year compensation for the TV networks from successive federal governments so the TV networks could deal with technology changes, right at the time of increased competition for them.

Back in 1999, small business newsagents had their exclusive territory ripped from them by the Howard government. No compensation was paid. I estimate that at least $500,000,000.00 was wiped from the value of the newsagency business assets as a consequence of the deregulation. I suspect the cost was more than the $.5B I estimated.

Some of the write down is being felt today as long-held businesses are sold.

Yet no compensation was paid to newsagents.

Compensation had been paid years earlier as the federal government forced the sale / closure of pharmacies as Australia had too many.

But no compensation was paid to newsagents.

The newspaper publishers and magazine publishers at the time offered no support of small business newsagents in pursuit of compensation. Some of those parties involved were robust in representations to government seeking compensation for TV networks.

Bow we see the generosity of state governments, conservative and labor, to taxi drivers to help them deal with deregulation.

Newsagents have every right to feel aggrieved.

On the politician side those around at the time of deregulation said newsagents were poorly represented. Maybe so but I would have expected greater care for newsagents than taxi drivers given the role back then of the local newsagent in the community versus the role of and respect for taxi drivers today.

With this latest taxi driver news it is clear newsagents were dudded. While there is nothing for today;s newsagents to gain, it is a reminder of how useless politicians are when it comes to representing their constituents. They look after themselves and their closest mates first followed by those who they feel could do them harm. Newsagents never made it into that top three.

If I had a say, I’d pitch that taxi drivers get no compensation for deregulation. You can’t have a free market, a global market and offer compensation. But, then, we don’t have a truly free and global market – only when it suits vested interests.

22 likes
Newsagent representation

Sunday newsagency challenge: trim labour costs

Labour cost in a newsagency should be between 9% and 11% of revenue where revenue is product revenue plus commission from agency lines. Labour cost should include fair market costs for all who work in the business. If your labour costs are outside this band and if your overall gross profit is average, your business is falling behind. My challenge today is to review your labour costs in pursuit of lower costs.

6 likes
Newsagency challenges

Sunday newsagency marketing tip: Father’s Day card promotion ideas

Too many newsagents cost themselves card revenue by not engaging with the card category. They think the success with cards it a matter for their card supplier. Such a view is wrong. Retailers have more influence over the success of cards in their businesses than the cards themselves.

Here are my suggestions for engaging with cards this Father’s Day:

  1. Talk about Father’s Day cards on your business Facebook page. Daily. But in a fun way – show off favourite images, play to your audience.
  2. Place cards at the counter. Have a pitch ready: have you got your Father’s Day card yet?
  3. Place a small selection of Father’s Day cards with magazines – weeklies or motoring or both.
  4. If the season has been slow so far this year, pitch an offer: three for 2 … do this Tuesday / Wednesday this week – where the other two cards could be any card up to a value you set.
  5. Include a Father’s Day card pitch on all receipts. Your software should serve this easily with little effort to setup.
  6. Have a prize for one Father’s Day shopper. We have a drone as part of an in-store Hallmark promotion.
  7. Offer a free stamp with every Father’s Day card purchased this week.
  8. Place Father’s Day cards in with your Father’s Day gifts.
  9. Keep the display fresh.
  10. Run several small boosted Facebook posts over the next week promoting Father’s Day cards and your business.

Plenty of retailers have Father’s Day cards, it is a competitive marketplace. The best way to compete is to be out in front. Are you out in front with your marketing of Father’s Day cards in your newsagency?

7 likes
Competition

Sunday newsagency management tip: remind shoppers they are being watched

IMG_2098A simple sign like this placed near popular products could be the difference between someone looking and stealing. The sign is a reminder of the surveillance in the business. While there are other ways to show pop;le they are being watched, a small sign like this can week too. It costs less than, for example, screen monitors placed in-store. Costing a few minutes to make and a few cents to print, the sign is good value for money. This is why it is my management tip today.

7 likes
Management tip

Retro diary helps reach more people for calendars

IMG_2105We are leveraging this retro themed 2017 diary from Universal as a call out to people who might otherwise think of diaries as bland and boring rather than connecting with a passion. This diary is an excellent example of an opportunity for promotion on social media and elsewhere to combat blindness to the possibilities of what people will find in your shop.

3 likes
Diaries

Educating customers to not pay full price for magazines

Further to my post yesterday about discounted magazines, here is how a different business in another airport looked yesterday morning when I walked apart. This is the message to passers-by.

FullSizeRender 26

The key message people in this busy airport see is magazine bundles at substantially discounted prices. Even though these are only Bauer titles, they are in prime position, placed I suspect for maximum impact. This business might as well not have other titles in these categories.

I think it is nonsense to suggest shoppers will recognise these offers as only at airports given the other retail outlets that have them from time to time.

Airports started doing them time to time, now they appear to be permanent.

Deeper in tis shop yesterday Lovatts also has their discount pitch:

FullSizeRender 27

While I love how the titles are displayed, I am frustrated they have joined the discount magazine party.

These publishers need to be certain of their long game and certain of the role they expect of retailers. So far, there has been no disclosure of this to retailers from what I understand.

As a newsagent I want the whole of the magazine department to be promoted with a fair supply model and a fair margin. Using us in a discounting turf war does not benefit us and leaves me wondering about space allocation in the newsagency.

13 likes
Bagged magazines

Are newsagents ready for a world of permanently discounted magazines?

In a newsagency at Adelaide airport earlier this week I was surprised by the extent of discounting of key magazine titles. While this has been happening for years, the extent on show in Adelaide was greater, leaving me to wonder when we will see this in all retail outlets.

Bauer and Lovatts are the two publishers engaged in this Adelaide location. While only two publishers does not sound much, their level of engagement is considerable. Take a look at these four photos from the one business. I could have included more photos of more facings beyond these:

IMG_2015

IMG_2014 (1)

IMG_2012

IMG_2011

Anyone shopping here could reasonably wonder whether they should pay full price for any magazine. Indeed, the scale of the promotion in the business is so strong I expect it would damage shopper perception of the value of the titles – but, hey, I am not an expert in this area.

This promotion does not make sense to me as the retailer as it appears designed to lock a shopper into a publisher. I want to promote the whole magazine department, not just one publisher, certainly not one publisher where the margin dollars I make are cut as a result of a promotion like this.

But I suspect this retailer is not losing margin dollars as I suspect the publishers are compensating them to the value of the margin from a full cover price. When publishers have offered this type of promotion to newsagents they have not compensated to the value of the full cover price from what I recall. Even then, if they did, it would not be ideal in that you are not promoting the broad offer you have in-store.

I have made no secret over the years that I do not like campaigns like these discount bundle offers. I think they are bad on many levels. yet some publishers appear addicted to them.

While publishers have told me that transit is ideal for these bundled promotions, I have seen them too often in supermarkets, convenience outlets and petrol outlets. This does not augur well for newsagents who see magazines as a point of difference, something to value, something through which they attract key traffic. Educate that traffic to hunt for a bargain and you see your value as a specialist retailer devalued.

My question for newsagents is: Are you ready for discounted bundles of magazines to become the new normal?

5 likes
magazine distribution

Poor reporting from Australian Gift Guide on retail

The headline on The Australian Gift Guide article is disappointing: Seven major retailers facing collapse.

Why is this news? It reads as speculation. Why is this business magazine reporting it? Do they want to talk down retail?

The article offers no evidence for the core claim:

It’s all doom and gloom for some Australian retailers as they are facing extreme risk of financial ruin over the next 12 months according to a report by SV Partners.

The well-known retailers have an annual turnover of more than $100 million and include a large clothing retailer, two computer retail giants, one big supermarket/grocery store and a large newspaper/book retailer.

While the article goes on to quote numbers, it does not tie this back to the headline claim.

It is articles like this that cause bankers, landlords and others on whom small business retailer rely to look at us with suspicion. Thanks a lot Australian Gift Guide. Bad job.

4 likes
Newsagency challenges

Too many newsagents don’t know what they can sell in their businesses

A colleague newsagent had a customer waiting for them when they opened the shop at 6am Monday this week. The customer has driven almost half an hour to be at the store at opening time to purchase an item priced at $349.00. They wanted to ensure they got the item.

So, by around 6:05am, the business had completed the $349.00 sale and racked up $175.00 in gross profit. That is more than the business will make from newspapers in the day and close to what they will make from magazines in the day. From one purchase.

What a terrific story on several fronts: that the customer was there at the opening of the shop, that they had driven half an hour and that they would tell others about their experience.

This is the newsagency of the future is, a retail business allowing specialist sought-after products to define the business more so than the shingle, a business being unafraid to stock items way outside what is usual for a ‘newsagency’.

Way too often newsagents tell me they cannot sell expensive items in their businesses. Most times I hear this the newsagent making the comment has not tried more expensive items, they have not created the story in-store to ensure success with ore expensive items.

My message today is that what we can sell in our businesses is way outside what we think we can sell.

I know of newsagency businesses that have closed because the owners have not experimented beyond the barriers they established themselves for their businesses.

I appreciate it is tough to make such a move as it means ditching being an agent, becoming a retailer and trying products about which you probably have little knowledge. All it would take is someone you have never seen in your shop visiting and spending hundreds of dollars on an item once for you to tear down your barriers and seek out more on these opportunities.

The newsagent who achieved the $349.00 sale on Monday did so on the back of a special event they ran on the weekend that attracted plenty of new shoppers, some people travelling two hours to be there.

Gone are the days of you thinking about your newsagency as serving a territory.

This is a new borderless world. Attracting shoppers starts with buying beyond what is traditional for the business.

There is growth out there for the taking.

7 likes
Newsagency challenges

The broken magazine supply model: Gross oversupply of Just Bikes magazine

We usually sell one or two copies of Just Bikes magazine. We are being supplied 40 copies of the latest issue. 40!

Representatives of distributor Gordon & Gotch will say it is a mistake. The thing is – too many mistakes like this are being made. To make matters worse, the process of resolving such mistakes is time consuming and fault prone, costing newsagents plenty.

I suspect magazine publishers don’t know how bad the situation is.

UPDATE: 18/8 – Turns out I am not alone. Something is seriously broken here.

9 likes
magazine distribution

ACCC seeks feedback on proposed acquisition of APN News & Media Limited Australian Regional Media division by News Corp

On August 2, the ACCC wrote to interested parties seeking views on the proposed acquisition of APN News & Media Limited  Australian Regional Media division by News Corp. You can see the ACCC letter here. The closing date fore submissions was August 15. The ALNA (formerly ANF) emailed QLD newsagents on August 16 at 4:26pm seeking feedback for their submission.

Note the ACCC’s areas of interest:

The ACCC’s investigation is focused on the impact on competition. In particular, we are seeking your views on:

  • how closely News’ publications (including websites, where relevant) compete with ARM’s publications for the supply of content to consumers and the supply of advertising space to advertisers
  • the impact of the proposed acquisition on competition, and whether it will:

    • lower the quality of content, especially local news content

    • reduce the choices available to readers for local news content

    • increase newspaper prices

    • increase the price of advertising, especially in newspapers in Queensland and northern New South Wales

  • whether, following the proposed acquisition, there would be sufficient competitive constraints on News to ensure the relevant content and advertising markets remain competitive.

Attachment B of the ACCC letter outlines further topics for which they are seeking feedback. These could be of particular interest to newsagents:

4. If the proposed acquisition went ahead, would competition from other media suppliers in Queensland and/or northern NSW provide a sufficient competitive constraint on News to ensure it offers content/advertising on competitive terms? Specifically, which media suppliers might provide a competitive constraint?

5. Do you consider News, ARM or any other market participant, to be a particularly vigorous competitor in the supply of local or regional news and information in Queensland and/or northern NSW on aspects such as quality, range or diversity of content (e.g. local news/information), price, promotional activity or any other factor?

6. What impact do you consider the proposed acquisition will have on competition in the supply of local or regional news and information in Queensland and northern NSW generally or in particular regional areas? Please specify any particular geographic regions you are concerned about.

4 likes
Competition

WA and the UK show how to motivate lottery customers

IMG_1490 (1)The UK Lottery is promoted through the messages of good it does for the community through lottery ticket purchases. This message is pitched in all the collateral used in retail, including the front of store promotional unit I saw recently when in Manchester.

The headline of THANK YOU stands out, reinforcing the message of good purchasing lottery tickets does.

I think this plays a role in driving sales. It also connects the business selling the tickets with the good words done as a result of the lottery ticket purchases.

Western Australia is the only state or territory in Australia where this level of community connection remains, through Lotterywest. In WA, they, too, promote the community connection in-store and elsewhere.

I think this is an important differentiator, especially with the rapidly rising profile of Lottoland and the takeover of lotteries everywhere in Australia except WA by the publicly traded Tatts Group.

We know from card sales at Christmas time that plenty of Australian shoppers appreciate supporting the community work charities through deliberate of purchases based on charities supported.

If I was an influencer at Tatts I’d be urging the company to deeply engage with a beloved charity in Australia, I’d want the company to link good community works to the purchase of Tatts lottery products.

While the company does engage today, it does not do so in a way that translates to a message at retail and I think this is where it misses out.

The Tatts / Lottoland comparison shows the difference is primarily in how products are sold – at least that is the perception pushed by the high-rotation Lottoland ads.

I think Tatts needs to change the conversation and following the British and WA lead could be worth considering.

At the same time I’d urge Tatts to pull back on the highly regulated approach to its independent retailers. I’d suggest they have one metric – sales. This would improve the love retailers have for Tatts and that, in turn, ought to improve sales.

Lottoland is running an aggressive race and Tatts currently appears to be way back in the field. It needs to significantly change its approach if it is to catch up.

8 likes
Lotteries

Where ransomware starts

Here is another example of the start of a ransomware attempt. This email comes in and the immediate reaction is this isn’t for me. Being a suspicious type I don;t click on it. Plenty of newsagents are and this is why they are being locked out of their computers.

Screen Shot 2016-08-16 at 2.52.22 PM

If an email looks suspicious, don’t open it just to check it out – you will be locked out as happened to two newsagents I know of today.

Read my advice from the weekend.

5 likes
Newsagency management
Trending Articles

Fairfax changes approach to TV Guide, disrespects newsagents

Published on April 20, 2011

What do you think of the Powerball changes?

Published on February 16, 2018

IPS releases new magazine contracts

Published on June 21, 2011