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

Author: Mark Fletcher

New Bill Express shareholder

Fortis Clearing announced to the ASX today a substantial shareholding in Bill Express. They have 49 million shares or 12.3% of Bill Express. This was a non-cash transaction – the shares were acquired “under the terms of existing stock borrowing agreement”. This from a Fortis ad on CareerOne:

Fortis Clearing Sydney Pty Limited is a wholly-owned subsidiary of Fortis Bank SA/NV, a global banking group incorporated in Belgium and the Netherlands. Fortis Clearing Sydney generates the majority of its revenue from the provision of third party clearing services to the financial services industry. The company operates predominantly in Australia, and employs approximately 36 staff across its operations.

It will be interesting to see if this changes things for newsagents. Today has seen plenty of movement – groups of newsagents organising to get together to fight against Bill Express, more newsagents lodging complaints with various statutory authorities and all through this silence from Bill Express back to newsagents who have contacted them.

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Bill Express

Stationery in New Zealand

I’ve been in New Zealand today and had an opportunity to see a variety of retail situations.   What interested me is that the businesses selling stationery carry less of the rats and mice products than Australian newsagents.  While there is a risk in reducing range, I’d suggest that they have done this here for sound economic reasons.

We need to look carefully at how our stationery offer is shopped and what it being sought.   While being the stationery retailer of last resort has some emotional appeal it’s not enough to build a business future around.  I suspect this is that New Zealand retailers in the stationery space have found.

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Stationery

Has Bill Express fully informed the market?

The announcement by Bill Express to the Australian Stock Exchange yesterday does not, in my view, fully inform the market. Investors have not been told of the tsunami of anger the changes announced by Bill Express has unleashed by newsagents against the company.

To my mind, Bill Express ought to inform the market that:

  • Bill Express, without forewarning replaced its long standing commercial terms with newsagents with new terms.
  • The terms are contrary to those enshrined in agreements with newsagents.
  • The new terms have been applied retrospectively.
  • The new terms are less favourable for newsagents, most are immediately worse off
  • Bill Express is not responding to complaints from newsagents
  • Newsagents have complained to the ACCC about the behaviour of Bill Express, citing unconscionable conduct and false and misleading conduct
  • Individual newsagents have commenced action on state based legal forums
  • Groups of newsagents are openly seeking and sharing advice on class action against Bill Express

Some reading my posts about Bill Express will think that I’m enjoying the mess they are making on their relationship with newsagents because of my involvement with eziPass, the alternative to Bill Express. I am not. Until a few weeks ago I and my team at Tower Systems were actively working with Bill Express in an effort to ensure a viable relationship between their offer and newsagents.

Indeed, for the last four years we have worked closely with Bill Express, seeking to bring to newsagent point of sale systems facilities which cut the time it takes to pay bills and process electronic vouchers. Bill Express only progressed these projects when it suited them and not when it suited newsagents.

They have botched their relationship with newsagents and which I understand the commercial focus of the changes announced this week, Bill Express has only taken this step because it suits them. This is not about newsagents at all.

If the market was more fully informed about Bill Express behaviour against newsagents over the last few months I’d expect their share price to be lower than its is today.

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Bill Express

Wall of cards

A key part of each of the Sophie Randall stores we create is our wall of feature cards. Each card is displayed full face – we have at least 350 designs on display in this feature space. This is in addition to our more traditional fixturing for every day and other cards from our more mainstream card suppliers.

While getting space for a feature wall of cards would be a challenge in a traditional newsagency, it is worth looking at if you do have the space and are in a location where you can own the card category. As the photo below shows, the wall looks impressive when well stocked:

new_cards.JPG

This photo shows less than half the wall of cards.

We only put unique cards in the wall, the kind of cards card lovers are happy to buy for their collection or for sometime in the future. These customers are the best!

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Greeting Cards

Justice and the graffiti thief

I heard a bit of a ruckus when in our Frankston store yesterday morning. A young guy had been caught by one of our team members stealing a marker, the kind used for graffiti. Sheri swung into action, grabbed the marker and told the criminal he was banned. No mucking around, swift and unilateral justice. I was pleased to see this – it’s the only way to deal with someone caught stealing a marker. The public humiliation meted out yesterday is worth more anything a police report could bring.

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theft

Leveraging the OzLotto jackpot

OzLotto jackpotting to $30 million next Tuesday is a wonderful fillip for newsagents. who sell lottery products. The traffic boost gives us an opportunity to leverage sales through the business. We’re investing in dressing the store for the event and hoping it jackpots again. We’re refreshing our counter offers to ensure that even those who don’t browse beyond the lottery counter can boost other sales.

In our two newsagencies without lotteries we are refreshing our offer out of respect for the increased retail traffic primed by the jackpot.

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Lotteries

Missing Take 5

t5_gone.JPGWe didn’t receive Take 5 today.  After spending too long waiting on the phone to the distributor they suggested we would get replacement stock on Friday.  I explained this is no good because we sell 75% of our stock today.  After robustly making my case and waiting some more they said they would see what they could do.  They came through for us – Take 5 just arrived.  If only this could have been handled without all the time spent getting the matter escalated.  This is a retail business.  No stock = no sales.

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magazines

Moving around

basket_builder.JPGWe moved the ACP basket builder magazine stand in our newsXpress Forest Hill location on the weekend – away from the front of the shop and down next to our busiest counter.

While there is nothing much in the move, too often in newsagencies we have a set and forget approach to fixtures like the ACP basket builder. Regular customers get as store blind as us and the promotional stand soon loses its value of the business.

By moving it we have revived interest and boosted the value of the stand. The move is part of the regular cycle of change in the shop, a cycle which keeps us fresh and helps drive good sales.

The only downside of the move is that sometimes the police from ACP will not be happy with the location. My answer to that would be that daylight loses it’s appeal if that is all you get.

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magazines

Winter favourites cookbook

winter_fav.JPGThe new Winter Favourites cookbook from ACP feels more like a magazine than a cookbook. It’s a departure from the other cookbooks in the succesful ACP line.

Given the look and feel of Winter Favourites we are promoting it as a magazine. The display in the photo is a couple of days old and is already generating good sales.

As I’ve said here recently, our goal is to sell through as much of a title as we can in the first few weeks – before having to pay for the stock.

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magazines

The ethics of blogging

Howard Owens has an excellent blog post on information ethics in the context of blogging (among other things).  His words are an excellent reminder to all bloggers and those who comment on blog posts.  Here is part of what Howard wrote:

The information ethic begins with each person who both understands the power of information and the scourge of misinformation.

This is a role not solely for journalists, but journalists as the paid purveyors of information must not slip in adherence to high ethical standard (the ethical burden on journalists has never been greater); this is not a role not solely for bloggers, but bloggers as the vanguard of a new information river, must take on the burden of protecting and cherishing information; mostly, this is a role for all participants in the conversation, both the creators and the followers.

Not all participants will rise to the occasion, increasing the burden on those of use who recognize the responsibility.

The information ethic requires that we strive always for honesty, transparency, accuracy and fairness.

Howard is right about the role of bloggers and our obligation to protect and cherish information.  While in this place I’m occasionally engaged in competitive positioning, I accept the commitment to honesty, transparency, accuracy and fairness.

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Ethics

More calling cards for newsagents on eziPass

eziPass provides access to a bunch of phone cards newsagents cannot access through the Dialtime terminal. These include: Aussie Phonecard, Bubble, ChatMore, ChitChat, DoDo, Double Happiness, Go Bananas, GPS, Hello, Hello China, joy, Minute Max, Pay Peanuts, Phone Me, Savvytel, Stealth and Time.

With over 400 newsagents now on the eziPass platform, we’re helping the companies behind these calling cards re-energise their marketing which should further drive sales for newsagents.

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phone recharge

Ben 10, magazine cover star

ben10.JPGBen Tennyson, Ben 10, features on four magazine covers in-store right now: Kraze Club, K-Zone, D Mag and Disney Adventures.

Ben 10 is a character in a Cartoon Network TV show.  There is a Wikipedia page dedicated to the character and over 4 million website references and 600,000 blog post references.

While chasing down this information may seem obsessive to some, it helps us understand what we sell – we know more about the demographic, what they are interested in and that we can put four titles together in a feature display which might otherwise not happen.

Best of all is the Kids Birthday Parties blog which has ideas for Ben 10 themed birthday parties.  While Coles, Safeway and others may sell one or two of the magazines with Ben 10 on the cover, they will not go the extra step and have information about kids parties and the like.  This is where we can demonstrate our point of difference – leveraging product knowledge to add genuine value of shopping in a newsagency.

Reading some of the material online about Ben 10, it struck me that too often we focus on single titles because that is what publishers want.  Sometimes, a more holistic approach is better for our business.  This is the case with Ben 10 themed product in newsagencies this week.

I am grateful to Jane at Forest Hill for showing me the four covers and the opportunity we have.

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magazines

Free oven mit with Country Collections

country_collections.JPGThe free oven mit with the latest issue of Australian Country Collections magazine is why we are featuring it in the premium display at our counter this week.

Even though the title has a (long) shelf life of two months, our goal is to sell out in two weeks or less.

We have Madison and another title ready to follow in this counter location which we use exclusively for titles with free gifts.

While the publisher would argue that I should order extra stock if I sell out, the reality is that an early sell out works out much better for me than a top up order which leaves me with stock to return.

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magazines

April customer newsletter

nl_apr.JPGGirlfriend is featured as Magazine of the Month in our April customer newsletter. We also promote our refreshed card and wrap offer, Annette Sym’s Symply Too Good 5 and other products we’re glad to get behind.

This newsletter is simple to put together. We use Microsoft Word. Some of it is corporate but most is local to our newsagency. It is an passive, effective (and free) marketing tool for our business, customers ask about items we promote.

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Customer Service

Newspaper publishers talk future

It’s been interesting to read news from the Newspaper Association of America conference held in Washington over the last couple of days.  While some publishers are innovating and riding the wave of change others are taking a steady as she goes approach.  What is encouraging is that the discussi0on (debate) is happening.  Too many newsagents in Australia aren’t participating in similar conversations here.

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Media disruption

Bill Express king hits newsagents

I write to advise of a variation to the merchant agreement between your business and Bill Express. All income and sales margins are now provided on a performance based business model that provides greater incentives for our retail partners. Performance opportunities will be supported by a significant marketing and industry management fund allocation of a minimum of $500,000 per month.

This is the opening paragraph of a five page letter sent to newsagents today in which Bill Express announces that the remaining subsidies paid to newsagents are being removed.

The spin in the letter is breathtaking, it has to be since Bill Express is reneging on commitments made to newsagents years ago.

In my case Bill Express promised a bunch of direct and indirect benefits. This commitment got me to sign a contract. Today, the benefits have been unilaterally removed by Bill Express.

To be fair, I’d note that Bill Express will say I am better off with an incentive program. I am not better off.

This latest move by Bill Express against newsagents leaves me feeling that they are in trouble and have struck out against newsagents in order to preserve cash. I will be interested to see whether they make an announcement to the ASX – I would have thought that such a whack against your prime retail network is reportable.

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Bill Express

Digital vs. print magazines

To balance some of my posts here about the future of print magazines, year why Rex Hammock says Why magazines won’t be digital in ten years.   Here’s the guts of his view:

the roles of print magazines and so-called “digital magazines” are not the same — and that digital magazines may grow in importance and acceptance, but they will not replace print magazines as a medium, even if certain titles “convert” some or all of their circulation to digital products.

I agree, print magazines are not about to disappear.  However, at the fringes, they are fading and this is where Australian newsagents will feel the impact.  We sell between 1,000 and 2,000 titles and that range will diminish with time.  We need a business response to this shift while maintaining focus on growth of top selling print titles.

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magazines

The Age price rise

While it’s good to see The Age price increase to $1.50 – coming in May – I wish they would reward loyal over the counter customers as much as they reward home delivery customers.  The difference in price between the two is drawing people out of retail.

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Newspapers

Mags, newspapers grow in Woolworths

I am grateful to have been given scanned sales data for newspapers and magazines in Woolworths supermarkets for the year to December 2007:

  • Magazines $330,252,000, 2.2% growth on prior year.
  • Newspapers $116,585,000, 7.6% growth on prior year.

For the December quarter:

  • Magazines $83,400,000, or 3.2% growth on same quarter.
  • Newspapers $29,100,000 pr 8.4% growth on same quarter.

This data could include new stores. They opened 19 in the second half of last year and have 774 supermarkets nationally.

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magazines

Bill Express behaving badly

It seems that every day I receive a call or email from a newsagent with another story about frustration at the behaviour of Bill Express. The latest is from a newsagent who advised Bill Express / Dialtime that they had sold their business and that the incoming newsagent did not want the Bill Express service. Here’s the rest of the story the newsagent in his own words:

The very next day our system was turned of by Dialtime and was not able to be used for the next 3 weeks of trading. I called about the system being turned off and Dialtime stated that we requested the removal of the equipment and we owed $12,000 on our rental agreement and this put our account into overdue so Dialtime shutdown your system till your dept is paid. All the equipment was removed and new owners took over and installed a new system. Now Bill Express is saying I need to payout there rental agreement of approx 12,000 for equipment I don’t have anymore and the fact that I lost approx 25,000 worth of sales over the 3 weeks I was without Dialtime and eftpos.

The newsagent did not request that the equipment be removed. Based on what I have been told, Dailtime’s action was unwarranted and denied the newsagent the opportunity to earn an income. A smarter move by Dialtime would have been to discuss the situation of the change of ownership with the newsagent.

Now, the equipment has been taken and the newsagent is being chase for $12,000.

On the back of everything else newsagents are experiencing at the hands of Bill Express, this reinforces the view of a company stumbling badly.

Sure, I am involved in a product which competes with part of the Bill Express offering. Since it’s free, it’s not competing in the true sense of the word. Also, no one is making Bill Express behave badly – they are mucking this up on their own.

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Bill Express

Gems in the book sale

world_war.JPGWe continue to find gems in the book sale we’re running, like The First World War by Hew Strachan. Heading toward Anzac Day it’s a popular gift – ten copies in a couple of days. We can’t claim all the credit since we don’t control the titles in the mix. However, we have been smart enough to feature display titles which are relevant.

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Book retailing

Hearst invests in electronic paper

Hearst, the US newspaper publisher, is an investor in FirstPaper, a flexible electronic paper reader according to PaidContent. It’s not Hearst’s only investment in e-paper nor are they the only publisher putting money in this space.

Newsagents need to watch this space as the development of e-paper is entering a very interesting phase. Those behind the technology say two years, I’d expect sooner. Dvice.com has a quick background.

If such a portable, flexible and always on device is commercially available, why is there a need for a distribution channel for newspapers?

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Media disruption

Loving eziPass

We sent an email asking newsagents using eziPass to sell phone recharge and other electronic voucher products to tell us what they think. The response was overwhelming. So, we created the iloveezipass blog. Here is a bit of the fax we sent Friday to newsagents including some of the quotes:

ep_fax.JPG

The reaction to the fax has been excellent. Newsagents want a simple platform from which to sell phone recharge and other electronic product.

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Bill Payment

Risk to instant lottery sales

I spent a couple of hours behind the counter today to help with superdraw sales.  I struck me how significantly the arrival of Intralot will impact my lottery business and, I am sure, most others if the introduction does not go smoothly.  Scratch tickets are a perfect up-sell, customers love the convenience of putting icing on their gambling purchase.  Muck that up in any way and sales will be affected.

Between 13% and 19% of lottery sales include scratch ticket sales.

While briefings have started, there is not enough clarity on how Tattersalls and Intralot will work in with each other here in Victoria.

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Lotteries
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