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

Author: Mark Fletcher

Trading Post death throes

tp_may08.JPGThe wraparound cover of the Melbourne edition of the Trading Post newspaper is a reflection on the health (or otherwise) of the print publication. It is a four page pitch to buy and sell online, nothing about print.

I guess their decision to partner with Australia Post over newsagents to do their 100 point check for online traders ought to have demonstrated their disconnect with print and the print distribution channel.

I checked our sales and the sales in several other newsagencies last night – the Trading Post is shedding retail sales fast, faster than any other daily or weekly newspaper from what I can see. In one newsagency, sales are down 33% year on year looking at the January to May data.

If I were them I would be pushing people online too. However, I’d do it in partnership with newsagents rather than abusing them.

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Newsagency challenges

Bill Payment growth is a surprise

I am surprised at the 34% increase in bills paid in our newsagency using Bill Express in May 2008 compared to May 2007 given the poor health of the Bill Express company. Bill payment continues to be less efficient than I would like with most sales not including any other product.

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Bill Express

Leveraging newspapers

fhm_papers.JPGFHM will work better out of this recycled magazine stand next to our main newspaper stand than if we created a power end display.  We know from the success of ZOO and Alpha on the other side of the newspaper stand than popular male titles near newspapers work.  Hence the placement of the stand.  In return for leeching off the newspapers like this we have a second at the front of the shop, near our lottery counter.

It is important that suppliers allow us to break their rules in pursuit of better sales.

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magazines

House and Garden promotion

house_garden.JPGHouse and Garden magazine takes pride of place at the counter this week thanks to the free photo album which comes with the title. The display is not as ‘clean’ this week thanks to the $50 million Powerball jackpot. Nevertheless, I expect it to do as well as other titles we promote in this space with a free giveaway. The giveaway is key – its value has to be quickly identifiable.

I’d expect to sell more House and Garden off this space than the power end we did last week as part of our ACP commitment.

Girlfriend last week did well in this space, proving its usefulness with a younger demographic to what we traditionally target here.

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magazines

$50 to win $50 million

We are taking a great idea from a newsXpress colleague and creating a pack of Powerball tickets.  For $50 our customers will get several goes at the $50 million jackpot.  Based on a trial on the weekend it will work a treat.  Creating products like this around jackpots is a great way to make the most of the biggest lottery prize ever opportunity.

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Lotteries

Australia Post pushing Reflex

apo_reflex.JPGThe buying power of the Government owned Australia Post retail network is in plain view with their current offer of reflex for $4.95 a ream. While Big W and other retailers offer reflex for this price from time to time, only Australia Post pulls consumers in for such a low cost – thanks to their postal products monopoly.

This is where they abuse the protection of Government ownership. The Government owned Post Office opposite my newsagency ought not be competing with me in stationery – a sentiment shared with many newsagents in my situation.

UPDATE: I am reliably informed that Licenced Post Offices buy Reflex for $4.82 including GST.  Not happy I suspect.

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Australia Post

Bill Express and the direct debit

Given the mess of Bill Express and the removal of subsidies paid to newsagents by the company, some newsagents are taking steps to cancel direct debit arrangements for payment of the old Bill Express equipment. Without commenting on the appropriateness of such a step, I am grateful to a colleague who pointed me to advice on how to do this and a sample letter which could be used. An ACCC bulletin from 2002 also has some interesting comments to make about this.

Newsagents need to consider carefully the action they take. The direct debit is the monthly pain of the failing Bill Express service. The bigger picture is who “promoted” Bill Express to your business? If you relied on the advice or recommendation of an individual or some other party in making your Bill Express decision you might want to talk with your lawyer about any liability they may share.

I refer to my blog post from the weekend which outlines reasons Bill Express may be in breach of the agreement and why, to this non-lawyer, associated agreements could be terminated.

I stress, again, I am not a lawyer. My blog posts should not be taken as advice. The best advice for your business will be that for which you pay an appropriately qualified legal professional.

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Bill Express

Welcome fellow newsagency blogger

Garry Goodman of Churchill Newsagency has started a blog.  I’ll add a link to the blog roll on the right.  Garry joins Jarryd Moore of newsXpress Singleton and Peter Dunn of Dunn’s Newsagency in Tamworth as the Australian newsagency bloggers of which I am aware.  Steven Denham is the UK based newsagent writing at the Village Counter Talk blog.  These are all good voices worth engaging with.

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Blogging

The art supplier competing with newsagents

art_bar2.JPGFor a couple of years we did well with the Mont Marte artist supplies range.  Things went off the rails when they could not supply some items to us while continuing to supply their own retail store in Melbourne as well as customers who ordered the same products direct through their company’s e-commerce website.  Their actions made it clear that they preferred a direct to consumer relationship over their newsagent relationship.  We ditched Mont Marte and replaced them with the Canson rang, an art supplier committed to the retail channel and not seeking to compete with us.  Sales are great and customers are happy that we can more easily get the stock they want.  Mont marte going direct to consumers is not how newsagent suppliers ought to operate.  It will be interesting to see if they have learned their lesson.

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art supplies

Officeworks is not the cheapest

tax_rush.JPGBEAT THE TAX RUSH WITH THE LOWEST PRICES is the pitch screaming from the Officeworks website. The problem for Officeworks is that they do not have the lowest prices. Last week, one of their customers bought two packs of HP brand toner from us for 17% less than what they paid for the same product at Officeworks the day before. Our everyday price was lower than the Officeworks everyday price. The Officeworks pitch of the lowest prices is not true.

Businesses which want to save on stationery costs ought to check their local newsagency. I am sure our newsXpress Forest Hill store is not alone on beating Officeworks on price for some items.

Our customer was shocked at the 17% difference in price – hopefully enough to ditch the superstore and return to us next time for toner.

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Stationery

Rupert Murdoch on newspapers

“I just love communicating with people, whether print, TV, print, mobile and others. Print will be there for at least 20 years, and outlive me.” The quote is from Rupert Murdoch speaking at the D Conference in New York a few days ago.  He also called Google “the greatest company in America”.  PaidContent has more.

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Media disruption

Free music for all

Kevin Maney, writing at Portfolio, picks up on Chris Anderson’s thesis that $0.00 is the future of business.  Maney sends s shiver down the spine of music retailers and says songs should be free.  While music is some years ahead of stories and articles in experiencing disruption to the traditional distribution model, the challenges will be the same.  Newspapers and magazines will face challenges similar to the CD.

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Media disruption

Brilliant initiative from Waterstones

Waterstones, the High Street UK bookshop chain, has launched an initiative to encourage budding writers who want their short stories published. Given the breadth of product catgeories covered by newsagencies, we could launch similar competitions for people to:

  • Design greeting cards.
  • Write for a magazine.
  • Invent new stationery items.
  • Design new gift wrap.
  • Write Australia’s best letter.
  • Find the best use for recycling newspapers.

The Waterstones competition is good because it focuses on their core product category of books and connects with a popular aspiration. Newsagents could take a similar approach with a competition and drive media attention on categories primarily linked to us. It is the kind of feel good story which could get a run on the right day.

If I had to choose one idea, it would be design a card. It works on a number of levels and given that we own around 50% of that market, such a promotion would serve us well.

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newsagency marketing

AFL footy cards are tops

afl_cards_tin.JPGAFL footy cards, no matter how you package them, are a great habit-based product, the kind of product which brings people back and back to collect.  While they work a treat as an impulse item at the counter, it is the collectors who come in to add to their collection who are most valuable because of the opportunity to get them buying something else.  We have made sure we have plenty of stock because they sell right through the season.

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retail

About this newsagency blog

I have been doing some housekeeping around the newsagency blog this morning and checked traffic stats. This blog is attracting, on average, 1050 visits a day. Each visit results in 2.85 pages viewed per visit and the average time on the site per visit is three minutes.

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Blogging

Newsagents and the Bill Express contract

While the ANZ and other Bill Express creditors and stakeholders are, I suspect, working through the weekend on a restructure for the business, Newsagents are looking at how they can get out of their Bill Express contract and the associated lease for the equipment Bill Express installed in newsagencies.

When newsagents signed on for Bill Express, they signed up to pay $495 a month for four years to get access to equipment worth around $3,000. This was a nice earner for the company – having newsagents provide working capital for their under-capitalised business.

While the two agreements newsagents are with separate entities and cover separate functions, I would have thought that newsagents could have them considered as one since one relies on the other and they are with related parties. If this is the case, the contract (the two agreements) could be challenged, in my view, on several fronts:

  • Outage. The level of network outage over the last two months has been unacceptable. Not being even able to process eftpos means customers go elsewhere and impedes our ability to drive revenue and fund lease/rental payments on the equipment (which is not working).
  • Product unavailability. Optus has often been out of stock over the last six weeks. With Optus being the top selling mobile recharge brand, newsagents not having stock disadvantages their businesses. The lack of performance of Bill Express on this ought to, of itself, be grounds for challenging both agreements.
  • No customer service. Bill Express / Dialtime help desk people are never available and do not return phone calls. This lack of support means individual newsagent outages are prolonged and these limit our ability to achieve revenue necessary to service the rental/lease agreement.
  • Ad screen failure. My Mi_Systems ad screen and many others are not working and the company does not respond to requests to get them active. The outage of this screen is denying me a revenue opportunity and therefore impedes our ability to service the rental/lease agreement.
  • No marketing. In February, when announcing the removal of the subsidy, Bill Express committed to using around 30% of what they should have paid for bill payment commission to better market the service on behalf of the network. I have seen no such activity. This makes me a creditor of Bill Express along with thousands of newsagents.

Given the near collapse of the company and its services over the last six weeks I suggest that Bill Express is incapable of performing under the terms of the Bill Express / Dialtime agreement and that this failure is grounds for terminating the TBS equipment leasing agreement.

But I am no lawyer. These are issues lawyers ought to be considered by lawyers along with other matters relating to how 3,500+ newsagents got into this mess in the first place.

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Bill Express

Cross promoting with magazines

pball_mags.JPGSo much of today and the next six days is about the Powerball $50 million jackpot.  Today we have extended our promotion of the jackpot deep into the newsagency including across magazines.  Our encroaching on magazine space is compensated by a refreshed magazine display at our main lottery counter and leading to this.  While we are offering the up-sell, it is equally important to have the shop do this for us – in the magazine department and elsewhere.  The jackpot value is rare so it makes sense to seek out new customers.

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Lotteries

Cool double sided wrap

doubwrap.JPGI love this double sided wrapping paper we have found. In the sample in the photo, one side has the larger hearts and the other side smaller. We have twelve designs to start.  They compliment our folded wrap, rolls, bags and boxes. The challenge with sheeted wrap is where to display while protecting the product.

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Wrapping paper

Bookmarks work for magazines

just_in_may.JPGThe Just In bookmarks we are using from newsXpress are working at drawing customer attention to titles just in. We find them especially useful for the low volume titles which can arrive on different days each month. While it’s a small activity on which to focus attention and invest in collateral, it is things like these bookmarks which separate a magazine specialist from others – arrogant as that may sound.

My view is that we make our own success in many things we do. This is why an investment in the bookmarks and other local in-store activities around several of our categories is a worthwhile investment. We are backing ourselves, creating IP and not relying on suppliers to do this work for us.

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magazines

The shopping trolley challenge

troller_aisle.JPGShopping trolleys are a problem for newsagencies and other retail businesses. Their drivers too often care less about the damage they do to fixtures and products when they bump around the shop.

Trolleys often block aisles and make the shopping experience of others less enjoyable.

One way to manage the problem is to make our shops less trolley friendly. While this would cause some customer backlash, many others would be happy. Banning trolleys would give us back more control over the shopping experience.

On some Saturdays we have have upwards of six trolleys in the shop being pushed around and getting in the way. Two in one aisle disables that aisle for everyone else in the shop. This must impact sales. So, maybe it is time to build a newsagency which does not accommodate shopping trolleys.

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retail

Promoting the $50 million jackpot

pball50.JPGWe have papered right around the counter, up the walls and across the top to promote the $50 million Powerball jackpot.  We have also papered multiple places in the shop with the posters we made yesterday to promote the jackpot.  We have our team also offering the up-sell and several other strategies in play to make sure that we achieve our sales targets.  We have set two sales targets with team rewards at each point.  We are still building what we will do next week in the last couple of days of the jackpot.

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Lotteries

Easier mobile recharge for newsagents

Thanks to further discussions with the folks at St.George Bank, we have navigated a way for newsagents to more easily access Optus and Vodafone recharge product. eziPass newsagents who sign for the St.George Bank deal can install a terminal to process Eftpos and credit card transactions as well as dispense Optus and Vodafone recharge. Everything else can be sold through eziPass. If we are fortunate enough to able to bring Optus and Vodafone to the eziPass platform in the future and you then wish to move to an integrated Eftpos solution (where Eftpos is processed through your computer) St.George will swap out the first terminal for an integrated unit without additional cost.

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phone recharge

School days journal

school_days.JPGThis school days journal is a product we have at our Sophie Randall business which should work equally well in newsagencies.  It’s a folder with all sorts of sections for recording information about the school experience.  This is the kind of gift item which suits newsagencies.

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Gifts
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