Maybe it’s just me but Real Living appears to have undergone a makeover. The latest issue certainly stands out among the crowd with its strong blue and red masthead. In among Notebook, Home Beautiful and other titles in the category, Real Living is the title you see first. We have it as a feature magazine this week on one of our aisle ends. There, it looks good, but not as good as in the magazine fixturing – this is where it really stands out.
Intralot has started previewing their offer to newsagents and other retailers. It looks exciting and is bound to shake up over the counter soft gambling. One challenge is how retailers who currently offer Tattersalls product navigate bringing Intralot into their business. Tattersalls has effectively quarantined real-estate at the counter. Newsagents gladly provided this when they had the full suite of products. With half the range (scratchies and some online product) soon to disappear from the Tattersalls offer one would expect that some of their real-estate would be freed. At the moment that does not appear to be an option.
I hope that common sense prevails. The last thing I want is to have to increase counter space commitment to sell close to the same value of product. I’d hope that Tattersalls releases some of their real-estate. This would be fair for newsagents and also facilitate better customer service. the last thing customers want is to have to purchase scratch tickets and online lottery products from two different places in a newsagency.
The Elvis partwork is proving to be a huge success in each of our newsagencies. It’s great to hear customers comment that they saw the ad on TV. Marketing people say it’s important to connect with TV campaigns. This is one reason we go hard with new partworks right at the front of the shop.
This American Express stand has been outside one of our shops for at least two weeks. I’ve bee harassed every time I walk past – and I do mean harassed. They ask, I say no thanks and they usually come back with what, you don’t want to save money or how can you know you haven’t even looked. If I walk past and ignore them they usually call after me with a smart-alec comment. Do they not notice that I walk past several times in a day? It’s a hard sell and it upsets our customers. I have heard three people complain at our counter about the Amex people out the front. The last thing retailers in a centre need is American Express and their aggressive recruitment tactics getting customers offside. I wish they would go away and be banned from shopping centres.
Since we sold our home delivery run we have used the POS Solutions software to collect payment of home delivery accounts on behalf of the distribution newsagent. We have recently experienced first hand the service or lack thereof with this software. After almost two days of down time, waiting for something, anything, to happen, the problem miraculously fixed itself without any changes being made at our end or the distribution newsagent end. What frustrated us he most was the poor response time.
I’ve just checked sales figures for the Underbelly book we have in our three newsagencies: one has sold 15 copies, another 19 and the third 8. All in two weeks. This is the book on which the banned TV series was made. The sales demonstrate the value of being opportunistic. We’ve promoted the book at the counter, using a small footprint.
Fewer newsagency designs today have the ‘bag shelf’, the flat shelf on the counter on which customers used to rest bags. We have one in our Frankston location – the photo shows half the length of the bag shelf. I thought it looked out of date and was planning for it to be eliminated in our refit. The fact is, this shelf works. Magazines sell well – even though people rest their bags and other things on there when making purchases. We’re able to promote themes (as shown in the photo) as well as the high volume titles. So, I am looking at counter options which maintain this premium display space in a back to the future move. As the old saying says, if it ain’t broke…
The reality is, over time I expect the bag rail to become redundant – in a few years as more magazine traffic moves online. So, the new bag rail will be done in such a way that we have flexibility to place other products at the counter. This is key to newsagency design today – flexibility in fixturing.
For our next round of changes the bag shelf remains. But we may tweak it to leverage more sales from the real-estate but more on that another time.
The Age was late in some parts of Melbourne today, reminding newsagents of how one seemingly small problem can have a knock-on effect through the day. The Sydney Morning Herald was late in Sydney today too. Up there, however, the problem appears to be more than a once off. In the UK newsagents are compensated for late papers.
In response to the many calls from newsagents venting anger over their treatment by Bill Express this week, Tower Systems put an offer into the market yesterday to facilitate access to the eziPass alternative:
Newsagents angry at the removal of the $250 per month marketing subsidy by Bill Express are switching to eziPass from Tower Systems.
eziPass offers 300 electronic products including phone recharge, tourist attractions, tollway payments, movie downloads and other products. Details can be found at www.ezipass.com.au.
Access to eziPass does not require newsagents to sign a long contract. Payment for stock is made weekly and margins on some items are considerably better.
eziPass is available immediately from within the Tower Systems software, providing newsagents with a good alternative to Bill Express.
In response to overwhelming demand, Tower Systems has created a special offer, bundling Point of Sale and eziPass for newsagents not using Tower today. This special offer is available for a very limited time.
While Tower Systems is making a standalone version of eziPass available to all newsagents in mid April, many are making a move today, preferring an integrated solution.
An announcement is expected next week on a preferential banking relationship with competitive rates. Tower Systems also anticipates an announcement regarding Optus and Vodafone for its eziPass platform.
Tower Systems already serves over 1,450 newsagents nationally.
Bill Express has misread the market and, I suspect, now regrets their treatment of newsagents. They will need to act quickly to stop their retail network shrinking. In their letter to shareholders yesterday they talk about restructure. They don’t say that they expect newsagents to carry $875,000 a month of the cost of this.
A couple of days ago we installed a new art bar at our Forest Hill location. The photo below shows part of the range. We also have canvasses and other products for the art marketplace.
The entire range if from Canson and is part of a newsXpress exclusive relationship. Art customers are efficient for the business, buying plenty of other items when they visit.
A Facebook magazine, yeah, that makes sense. Not! People using Facebook will find it virally, they don’t need a magazine, especially not one priced at $14.95 for less than 100 pages. If they do need a magazine then they Facebook is not for them. This is a bad offer for newsagents with a three month on-sale period. There is no hope of covering the cost of carrying the title for all but, I’d guess, 1% of newsagents.
Hey, do I get extra pay for February 29 since this year has 366 days and my pay is for 365 days. That’s what Ben Fielding wanted to know at our Forest Hill store. It’s the funniest thing I’ve heard all week. not that I should laugh at his expense. But, well, I am. Even though we explained how he’s paid I suspect that Ben still thinks he should get an extra day of pay. I can’t wait for April 1. Sorry Ben.
We sold out of Good Taste in 24 hours with a display at the counter. If we’d placed the title in its usual location we would not have achieved the result.
This counter location for titles with giveaways works! I’d rather sell out of a title than have sales drip over the month, especially when it’s a title pushed hard in supermarkets – Good Taste is a house title for Woolworths / Safeway.
JULY 2008 UPDATE => for my latest posts on Bill Express, click here.
Bill Express (ASX code – BXP) has unleashed a firestorm of anger among newsagents, its retail network, by removing a long standing marketing subsidy making the relationship loss making for many. The subsidy was removed prior to Bill Express advising newsagents.
The Bill Express action risks newsagents turning off the service and the company being without its retail network. This would upset biller partners as well as telcos such as Telstra, Optus and Vodafone who rely on newsagents to sell recharge through the Bill Express / newsagent relationship.
Some newsagents are calling for a national boycott of Bill Express, some have already stopped accepting bill payment through Bill Express and some are researching possible legal avenues – several having met with lawyers already.
Removal of the marketing subsidy is a high risk strategy by Bill Express. They knew it yet they proceeded. They were told prior to the announcement how newsagents would react yet the proceeded. My assessment is that they chose the lesser of two evils, they chose to save their cash.
In 2003, Bill Express was a small start up in need of capital and a retail network. Newsagents provided both on the promise of shared profit. 3,500 signed up – committing to leases valued at $25,000 each, taking the financial risk and unlocking around $87.5 million in free capital for Bill Express. I was skeptical and arrived late at the Bill Express table. In hindsight, my skepticism was well placed as were the tough questions put by some in the industry.
But that’s history now, newsagents signed up, we delivered the retail network and capital to Bill Express. We signed contracts which are difficult to terminate. Thanks to the withdrawal of the marketing subsidy, we are burdened with around $3,000 a year more in bottom line costs. This is our reward for our extraordinary support. Bill Express, in the meantime, has added $875,000 a month to their bottom line by removing the marketing subsidy.
It is easy to see the winner in this. But it was always going to be so. Bill Express was clever to spin the impression that the subsidy would remain while always knowing that it would end.
It is instructive to break down the four-part Bill Express offer: The bill payment side is loss making; the in store advertising screen system XIP media is a failure; the BOPO debit card is, well, very slow at getting off the ground. Bill Express, as part of their spin to newsagents this week, uses an example showing I can make money if I sign up one new BOPO customer every day. I currently sign up, on average 1.5 a month. One a day is a huge stretch for something with slim margins and a high labour cost; the Dialtime phone recharge component is the only money making aspect for newsagents. However, what we make from this is diluted by the now chunky Bill Express fees.
The numbers put to newsagents by Bill Express this week to show how they can make money are not being believed. Indeed, they make matters worse for Bill Express as they show an organisation out of touch with its retail network.
Recovery from the loss of faith among newsagents looks insurmountable. I wonder at what point Bill Express will have to make an announcement to the ASX about this.
I am conflicted in the Bill Express matter. Seven months ago, I and my team at Tower Systems started work on eziPass, a software product which competes with Bill Express. We developed this product and exclusively integrated it with our newsagency point of sale software. We have also developed a stand alone version which will be available in a matter of weeks free to all newsagents. Up to a week ago, 220 newsagents had signed up with eziPass. Sign ups have increased considerably since the Bill Express announcement this week.
While eziPass competes with Bill Express, my work and that of Tower Systems is pro-bono for newsagents. Neither I nor Tower Systems nor any business assocoiated with me makes money from eziPass. I know that by not taking a cut I was able to maximise the return newsagents achieved from selling phone recharge, attraction tickets, tollway passes and the 300 products through eziPass. This is why many eziPass assessible products have a better margin for newsagents.
While eziPass benefits from the difficulties in which Bill Express finds itself, Bill Express alone is responsible for its problems. It is responsible for promises made on its behalf to newsagents, the failure of the in store advertising screens, the slow uptake of BOPO and the now high cost of its old bill payment technology. eziPass is the smarter alternative. No expensive baggage. No capital outlay. No monthly fee. No onerous contract. No special computer hardware. There are fewer middlemen sharing the pie. It is integrated with point of sale for all 1,450 Tower newsagents and available from April for non Tower newsagents. Free.
I am pleased to be able to offer newsagents an alternative to Bill Express – for many it offers an attractive parachute.
The wrath expressed by newsagents over the last 48 hours is unlike anything I have seen before. They are angry and upset – with justification I would note. I am surprised that Bill Express has remained silent. It’s as if they are resigned to taking a hit because of their decision and that they’d prefer to weather this than reinstate the subsidy. Cash is king I guess.
Beyond the public anger being vented, some newsagents have sought legal advice on action against Bill Express over the removal of the subsidy and misrepresentations surrounding the benefits claimed prior to them signing up for the service. The problem for newsagents is the Bill Express contract many signed. It requires notice six months prior to the end of the agreement that a newsagent does not wish to roll over otherwise it is automatically renewed. Of course, most newsagents have not given such notice and have automatically renewed contracts.
My view is that the Bill Express contract will need to be tested in an appropriate forum. Whether this is tribunal such as the Consumer, Trader & Tenancy Tribunal in NSW or as high as a Supreme Court or somewhere in between remains to be seen. In the meantime, newsagents can vote through their actions by putting as little business through Bill Express as possible.
Heads up newsagents: Fairfax Media, the digital part of the newspaper publisher, is making an online play for Gen Y with a site currently called Kwerky. Here’s another newspaper publisher with a pure online play for a generation disconnected with newspapers.
We’ve found a good way to promote the free bueno chocolate with New Idea and Famous this week – using the acrylic unit in the photo with the magazine in one pocket and the chocolate in another, in front. It’s an easier pitch than having the magazines in their usual place and the chocolate bars at the counter. Our view is that for these up-sell promotions you have to show the premium with the product being promoted, it drives sales.
The brochure on the left has been pushed out far and wide by Australia Post. It makes the Post Office look like a phone retailer which they are in some locations. What is it with this government enterprise? Are they not happy with their postal service monopoly to the extent that they have to continue to take on small business. There are franchisees and independent small retailers across the country offering phones and related product. If there was a hole in coverage I’d understand but there isn’t. Australia Post’s government owned stores ought to get back to their roots and stop using their protection to hurt small businesses.
I apologise for the photo of this month’s Australian Photography magazine. It’s how it looks though, all packaged up in a sealed plastic bag like some porn product. Its’s not porn though. This month’s issue of Australian Photography is in a sealed bag because it is being given away with a copy of Great Walks magazine. While the package is a compelling offer, it’s not smart. Photography magazine buyers are keen browsers. how can they browse a magazine in a sealed plastic bag. They can’t. This is not smart retailing.
Here are some sales/marketing tips for Easter which I put together a week ago for Tower Systems users – I share it here in case some visitors find the ideas useful. Some are old chestnuts and others are, well, different.
Egg Hunt. Invite families in to hunt your store for eggs on one day. Make this a big event. Get the local paper to take some photos. Let the school, kinder and other groups know.
Easter Bonnet Parade. Invite oldies groups, retirement villages and similar places in to do a parade. This could be on the same day as the egg hunt. The more groups you involve the more your name will spread in the community.
Colouring contest. An oldie and a goodie. Get a good image and hive kids colour it in. The key is to display all the entries – note on the form that you will display all entries as this gets parents coming in to look at the work of their kids.
Easter of all nations. Invite your customers to write about Easter from the perspective of their nationality. Keep the brief histories to a page. See how many countries you can get represented. This could really help cross cultural boundaries and connect people who otherwise may not have met.
Window decoration. Invite a school class or kinder to paint your window in an Easter theme.
Egg race. Put a big chocolate egg on a small spoon and see who can race a distance around the shop without dropping the egg.
How to make a bonnet. Create an advice sheet or some flyer which helps people participate in Easter. There are other sheets you could do: why send an Easter card or traditional Easter meals etc. The more knowledgeable and useful you appear the more people will rely in you for seasonal connections.
Of course, the various events noted could all be done on the one day, creating something wonderful for all ages.
It seems that small is in with magazine publishers. We received Healthy Living from ACP magazines this week. I’m happy with the product and the category – health related titles are doing well. I’m unhappy with the long shelf life and more unhappy with the size. While they’d like us to put the title on the counter, I don’t have the space for that so it has to fit into magazine fixturing – which it doesn’t. What could have helped is the supply of fixturing with a universal clip of some sort which allows me to attach the display to the magazine stand. This way the title could look like it is part of the category rather than the poor cousin it looks today.
I appreciate that I am looking at this only from a newsagent perspective – supermarkets and other retailers will be happy with the stand supplied and the size of the product I am sure.
Douglas McLennan has written an excellent blog post about newspapers in the US and how they are dealing with challenges. He makes some interesting suggestions, especially the need to connect with small business.
I was surprised to see our supply of Australian Women’s Weekly increase 10% with the issue out today. There is no justification for this in our sales numbers.
Nationally, the audit figures for the six months to December 31, 2007 showed a circulation fall of 5.7% for AWW. So, I cannot work out why supply has increased. Other newsagents tell me their supply has increased on the back of falling sales as well. Something is odd here.
I would not mind if the increased supply was part of a marketing strategy but there is, as of this time, no evidence of that. So, we’re undertaking activity ourselves to try and move the stock. One idea we are pursuing is a farewell to Megan Gale pitch – she is giving up a successful modelling career so the cover is kind of her last hurrah in that role.
This oversupply such labour, space and cash out of newsagencies.
We’re taking a different approach with our counter based magazine offer this week. We’re not promoting magazines at all but educational books – as the photo shows. I liked the idea of resting magazines for a week.
The books were left from a book sale and rather than shove them to the back of the shop we made them a hero at the counter.
As is always the case with this space, it works – especially with the SALE sign (which took two minutes to do) on the stand and genuine bargains on display. Being located at our busiest sales counter helps too.
It’s a pleasure to see someone approach the counter with a newspaper and end up purchasing one of these impulse items.
Oh, it was Michael Luscombe, CEO of Woolworths, obscured by the ad for Smart Investor magazine stuck on the front cover of today’s Australian Financial Review.
The decision to stick this ad on top of news on the front page and over a news photo can’t have been made by newspaper people – I’d be shocked if they agreed to have their product compromised in such a way.
These stuck on ads tell us something about the respect, or lack thereof, the folks at Fairfax have for the medium which was once at the core of their business.
Beyond the ad itself is the disrespect folks at Fairfax show newsagents. They pressure us to promote Smart Investor in store and then they go and use products we sell to try and take sales of the title we are promoting from us. I can’t compete with the $43 off offer. Their pitch makes newsagents look expensive.
