Newsagency performance
January-May at Forest Hill looks good compared to January-May 2007. Number of sales is up 4%; Average sale value is up 16% – as a result of selling more items and some for a better price. We focus on traffic, items and margin – nothing smart in that.
While of magazines are up 8%, we are relying less on this category thanks to expansion of Ink and Toner (up 63%), Art (up 130%), Books (up 247%), Bill Payment (up 31%) and
This analysis is important to us because we are our key competitor. While this should be true for every newsagency, that I blog here so much about what we do it is important to see that it is working.
There is some not so good news in the numbers: Newspapers are down 3%; Stationery down 5% and Confectionery down 7%. Stationery is the department we accept the most responsibility for. I’d note, however, that stationery sales are low and the 7% is under $5,000 in revenue.
Many newsagents I know look at their numbers once a year when the accountant has done the figures. Any good point of sale system can produce the kind of comparison I use in seconds. It’s essential to good newsagency management.
While the growth we are tracking is good, it is soon eaten up by annual rises in wages and rent. These days we need to innovate just to cover the growing cost of doing business.
Vic. newsagent anger over Bill Express
The phones have run hot today following the announcement of a newsagent only meeting in Melbourne this Thursday, June 19, to discuss Bill Express. The most common feedback is – at last newsagents are doing something. Some newsagents who cannot make the meeting are pledging an amount they are happy to contribute to independent legal representation.
Victorian newsagents meeting re Bill Express
A newsagent-only meeting about Bill Express has been organised for Thursday of this week. The purpose of the meeting is to provide newsagents with information and a forum through which a course of action can be considered. The meeting details are:
Thursday June 19 at 11am
Crest on Barkly Hotel, Barkly Street St Kilda
The planned agenda for the meeting is:
- Update on Bill Express’ current situation.
- Update on action being taken by NANA, QNF, ANF and other groups of newsagents and consideration of whether joining any of these is appropriate.
- Discussion about the costs, risks and possible outcomes of Victorian newsagents commencing their own, independent, legal action.
- Likely cost, structure and timelines of group or class legal action.
- A vote on a resolution to establish a trust fund for the purpose of briefing legal counsel to advise and, if considered appropriate, commence action against Bill Express and any other party considered to have a case to answer in this matter.
- Vote on a steering committee to liaise with legal counsel if point 5 is passed.
- Discussion and vote on timelines newsagents require from the steering committee.
The meeting is anticipated to run for 90 minutes. While everyone has their own stories about Bill Express, this meeting will be focused on achieving group wide consensus and moving forward collectively as quickly as possible on the best outcome for newsagents.
As this is a newsagent only meeting, attendees will be required to register on arrival.
Newsagents are asked to bring to the meeting photocopies in a folder marked with your details evidence which we could provide to a lawyer should the meeting decide to proceed: Bill Express related agreements, promotional literature, of notes of conversations with anyone who recommended Bill Express to you.
For more further information, please contact: Adam de Jong, Romsey News and Lotto. Mobile 0417 383 730 or Mark Fletcher, newsXpress Forest Hill. Mobile 0418 321 338.
Pitching the news weeklies
We pitch Time and Newsweek with our newspapers for at least a couple of days a week. It is real hit and miss though. For years sales of these and other current affairs titles used to be consistent. Now, with their content available online, sales are cover driven – hence our placement above our two home-town daily newspapers.
Promoting New Idea
New Idea comes with a free pack of breakfast cereal today include the magazine, making it quite bulky and difficult to display in traditional fixturing.
We are using this as an opportunity to place New Idea right at the front of the shop and to help us out with a display issue – we can;t fit all the stock on our shelves as would usually be the case.
Note the display unit – it’s now seven months old and is still holding up well.
Growing Met ticket sales
Two of our newsagencies have recently started selling Met tickets – the tickets used for public transport here in Victoria. This move is part of the advance work for retailers who plan to sell Myki cards and top ups. What is intresting to me is the sales growth in Met tickets in each newsagency. Without any serious promotion, sales have grown quickly in a short time. More than 50% of the time tickets are sold with other items. This adds to their efficiency and makes the micro margin easier to digest.
Retail as being about balance. It is up to us to drive sales of higher margin items to Met ticket customers. the same is true for lottery sales, bill payment and mobile phone recharge. While I could easily refuse small margin service type items, my view is that we are better off with them and the traffic they bring than to risk losing the traffic altogether. I appreciate that this means we may be abused. To counter that we work harder at making the most of it.
Welcome to Gypsy Rose May
The extended Tower Systems family grew today with the arrival of Gypsy Rose May, a second child for Simon May, our Technical Services Manager, and his wife April. Gypsy is a welcome sister for James. Born this morning at 9:41am, Gypsy weighs 3.2Kg and measures 47cm. Gypsy and Mum are well. Dad is over the moon!
Apologies if you read this at the Tower Blog already.
Missing Luke
Hardly a day goes by at Forest Hill without a customer asking how Luke is doing. They’re referring to Luke Corbin who left to teach English in Vietnam and travel the world. Luke managed magazines for us at Forest Hill for two years, putting him in touch with most of our customers over that time. He juggled near full time work with studies at LaTrobe University.
In retail, you are only as good as your last customer service contact. Luke was exceptional in the eyes of our customers. They are genuine in their interest in his travels and whether he will return. Judging by his blog, Vietnam is proving to be everything he hoped.
Being smart with partworks
Years ago I saw that partwork titles were an opportunity for newsagents and pursued better management tools within our Tower Systems software. While the road has been occasionally rocky due to supply side issues, we have exclusive proprietary software which helps newsagents increase the sales of partworks, better manages the challenges and nurtures happier customers. This is not sales spin from the owner of a software company, no, it’s how I see it in my own newsagencies.
Partwork customers are efficient customers for a newsagency, considerably more so than any other magazine customers. I discovered this in our first basket research eight years ago. Partwork buyers are at least 33% more likely to purchase other product in your newsagency. Once I had that data it was imperative we help newsagents who want to drive better businesses to better manage the category. Now, with our exclusive partworks tools we have newsagents pulling customers away from other newsagents who see partworks as a chose they would be happier without.
Partwork publishers in the UK, their Australian agent and local magazine distributors like what we are doing. This is what helps us produce better outcomes in the partworks category for newsagents using Tower Systems software. It will drive further changes this year as we stay ahead of the game chasing better outcomes for newsagents who get behind the partwork opportunity.
There are no other magazine titles advertised on national TV where newsagents are the exclusive retail outlet. How many other suppliers advertise our channel like that? While some newsagents complain that we are used to drive subscription sales, the sales numbers and profitability of partwork titles in my newsagencies and others I work with is proof that the current model works – if you drive it hard and with the right technology at the store level.
We are business people and we need to run our newsagencies as business people. Partwork titles are an excellent business opportunity. Over the next month or so we will see Shrek, Dora Dress Up and Go, and, the Australian Movie Collection. Each one of these is an opportunity to connect with new customers because our newsagencies are known as the partwork title specialists in the area. Each new customer brings new opportunities.
Take the new Columbo partwork series. We sold out of issue 1 and have more on the way. We expect that between 5 and 8 regulars will emerge from the initial promotion. Multiple the value of their sales and the add on business and you can soon see the importance to the business of well managed partworks.
If this blog post reads to you as an advertisement, it is. I am proud that we are able to use the software we create to give newsagents a competitive edge. It is a competitive market after all.
Irish newsagents lose home delivery
Talking retail reports that Irish newsagents are angry that the publisher of the Belfast Telegraph has taken home delivery away from them in favour of a direct to consumer approach. The publisher is offering a “modest” fee for home delivery data from newsagents. It’s all about cutting costs in the supply chain.
Bill Express creditors stalled on an agreement?
Bill Express (BXP) owes me close to $2,000 in unpaid fees for each of my newsagencies. These debts are growing by an estimated $500 a month across the two businesses. In the four months that Bill Express has not paid the Advertising Rebate it guaranteed in writing in 2003, its indebtedness to newsagents for this has increased by at least $3 million. Its indebtedness is considerably higher if you add in the rebate tied to the equipment lease – estimated to be at least $3.5 million.
While the Bill Express directors will argue to the ANZ and other key creditors that they do not owe the money to newsagents, courts will be left to decide that. Newsagents are stumping up cash to fund various legal moves against Bill Express. With in excess of $6 million at stake and this accruing by more than $1 million a month it is no wonder newsagents are prepared to fund legal action.
My speculation is that the question over the company’s growing financial exposure to newsagents is one reason their mooted restructure has been stalled. I would expect that creditors would want to know that the Bill Express hole is not getting deeper by the month before they agree to new financing arrangements. Creditors would be well advised to talk direct to newsagents.
When I signed for Bill Express I did so on the basis that the Advertising Rebate of $210 was guaranteed. The company stopped paying this guaranteed rebate in February without reason. At the same time it advised it would withhold around 30% of my bill payment commission to advertise the service. No advertising has been done. I want the 30% back so I can put it to better use in my business.
In the meantime, I am contributing to a group legal action against the company.
Empty lottery scratch ticket bay
We are out if instant scratch tickets as are most newsagents and other lottery outlets in Victoria. Tattersalls say we cannot use the space for anything else even though they do not have new product approved by the State Government for this space. Premium counter real-estate is left looking pathetic – see the photo I took yesterday.
Tattersalls is not responding to our concerns nor is the State Government. While these two parties ignore the problem, retailers are left looking bad to their customers. I think we will have to take matters into our own hands if we are to maintain a professional retail presence at the counter.
Apple’s iPhone a classifieds medium?
Steve Outing writing at reinventingclassifieds.com speculates that the Apple iPhone could be a good platform through which to deliver access to smart classifieds. His Garage Sale example demonstrates how the iPhone and other similarly enabled devices can kill many categories of print classifieds once handset use is widespread:
Design a garage sale iPhone app that will pull in ads for local garage sales and map them. (This app would — no, must — bring in ads from the local newspaper AND other sources, especially free-classifieds sites like Craigslist and Kijiji.) Utilizing iPhone 3G’s new GPS functionality and ability to show map directions, the app would be a fantastic tool when driving around on a Saturday morning looking for garage sales.
The arrival o the iPhone in Australia is very exciting. It is a disruptive device to old media businesses like newsagencies and maybe we will start to take notice of how the world is changing.
eziPass stand alone shipped to first 50
The eziPass stand alone product, a platform competitive to Dialtime from Bill Express, was shipped a week ago to 50 newsagencies in advance of wider release. This is in addition to the 500+ Tower newsagents using eziPass integrated with their point of sale software. The free eziPass platform can be installed on just about any Windows computer with a broadband connection. It turns the computer into the equivalent of a Dialtime or ePay type terminal – dispensing phone cards and other product.
Jamie Oliver mugs in Frankston
The team at our Frankston newsagency has claimed ownership of the new range of Jamie Oliver mugs we have. Each mug has a saying like I’m Single, Dead Handsome, I’m Cooking. Someone at our newsagency has allocated mugs to team members based on these sayings. They are great gift, a perfect add-on to a card purchase. I really like the personalisation of the display at Frankston.
Best of British promotion
The folks behind six British magazines have a promotion running across the titles under the banner of The Best of British. I like the offer because it promotes more than one title. I also like it because it connects with a demographic which is successful for us. My only disappointment is the card insert in the magazines themselves. A ratty insert for a Beautiful Homes magazine is not a good look.
Bill Express and the ACCC
The Queensland Newsagents’ Federation is engaged in dialogue with the ACCC on behalf of newsagents on the Bill Express issue. This has developed as a result of the advice provided by the QNF to its members around two months ago. Many newsagents have written to the ACCC expressing their concerns about the recent removal of rebates by Bill Express and providing details of information and representations on which they relied in deciding to sign the Agreements.
The QNF has graciously offered to funnel relevant Bill Express information to the ACCC on behalf of any newsagent. If you have information you may consider relevant please make contact through:
Ann Nugent
CEO, Queensland Newsagents Federation
58-62 Pineapple Street, Zillmere Q 4034
P: 07 3862 7100 F: 07 3862 7111M: 0488 763 236
E: anugent@qnf.org.au
Alternatively, newsagents with concerns about representations made to them prior to signing agreements related to Bill Express which have subsequently been found to have been misleading could write direct to the ACCC.
Promoting Dolly magazine
Dolly magazine is our counter promotion this week. The free Napoleon Perdis Lip Gloss is a perfect giveaway to drive impulse sales.
The Perdis brand is promoted on Fox8’s Australia’s Next Top Model. We expect brand recognition to be high even among parents. This counter display will be seen more by parents than the usual (younger) Dolly consumer.
Understanding the back story to gifts with magazines can be helpful in making suggestions to customers.
We did not receive point of sale material for Dolly. We created what you can see in the photo.
Selling Optus prepaid
When we realised that the best options for selling Optus prepaid was to revert to physical stock we groaned. Today, eight weeks on, it is working a treat. Selling is much faster than through the Dialtime terminal. Scanning the cards gives us good stock control and the supply chain is more cerain. We have managed around our initial frustration and everyone is happy.
Software training for newsagents
Tower Systems‘ free online training courses are a real hit with newsagents. Hundreds have participated from the comfort of their homes and offices. Courses covered so far include: magazine management, new newsagent training, stock management, magazine returns and putaways. We have also run training sessions for suppliers with staff involved from different state offices.
One of the two sessions covered yesterday was on stock management. Jonathan Tay, pictured, led the session. Eight newsagencies from around the country participated. This is what makes online training valuable – we are able to connect newsagents who would otherwise not talk with each other. Connecting them as we do opens more possibilities for fresh business ideas.
One reason the Tower courses are rated highly is the technology purchased by the company to ensure the best possible attendee experience. Tower uses tools from WebEx. While these are expensive, the experience is better and the knowledge shared therefore more valuable. People who have had bad online training experiences have usually been using cheap online training software and infrastructure. This is not something you can be cheap with.
We are developing more online training and expect to announce new courses to the 1,500+ Tower Newsagents next week.
Tower continues to offer face to face free training as part of its user meeting program, having just completed a thirty city tour across the country. We also continue with our free face to face training for new owners out of each of our offices around the country.
The Age, now also on your mobile
The Age yesterday had this flyer inserted with the newspaper. This is a clever promotion around access to The Age through Telstra BigPond on a mobile phone.
I am thinking of framing the flyer and putting it on the wall to remind me and others about the future of news distribution. Newsagents need this image to be top of mind as they develop their business plans.
I have nothing against The Age on this. They need to pursue readers wherever they can. Cross-promoting with Telstra makes sense.
Across at The Australian yesterday I saw a different take on the distribution of news in the form of another ad from the Newspaper Works.
Newspaper mugs a hit
We have had these newspaper mugs in two of our newsagencies for less than three weeks and they are selling well. At Frankston we have sold 17 and at Forest Hill We have sold 12. Without any special promotional effort. We have placed the newspaper mugs near our greeting cards because they are a natural add-on o a card purchase. We would not have discovered these mugs had we not attended the Gift Fairs and seen the products which gift shops look at. Gifts is a challenging category which needs careful management attention and plenty of trial and error if it is to work.
Bill Express, who knew what and when
While the future of Bill Express remains unknown – the company extended its trading halt another five days today (groan) – the hunt for evidence and for people of interest by those behind several possible court and other actions continues.
Prior to joining the Board of the Australian Newsagents’ Federation in December 2003, I was provided Board minutes and papers for the previous year. This covers the period during which the Bill Express decision was taken. I have a dilemma around what I should or should not do with the information to which I am privy. In navigating my dilemma I need to consider my obligations to the “Company” as well as my obligations to its shareholders, newsagents. These considerations are complex for many reasons. I am certain that I am not the only former Director or officer of the Association with the same dilemma.
At least three legal briefs are being prepared around the issue of whether newsagents were deceived or misled into signing agreements for the Bill Express service and if so by whom. At least two Government agencies are asking questions of newsagents and others who may have evidence on which a case could be built. Three reporters are asking questions, two about the company and one about what due diligence was done (or not done) prior to the offer being put to newsagents in 2003. As I said, this is complex.