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

Author: Mark Fletcher

Newspaper home delivery versus retail

Victorian based Fitness First members have been offered The Age newspaper home delivered for 12 months on a Friday, Saturday, Sunday and Monday for $49.00. The usual price is $348.00.

While I agree it’s reasonable for Fairfax to tap into organisations like Fitness First with a mutually beneficial offer, I wish that they would provide an offer I can pitch to my retail customers. I have Age customers who are more loyal to The Age than new customers attracted through the Fitness First offer yet they have to pay full price. The loyalty of these customers goes unrewarded.

I’d like Fairfax to offer newsagents a subscription like deal for loyal home delivery customers. This would be demonstrate the importance of these retailers in Fairfax achieving its sales goals. As it stands today, the message for consumers is – don’t pay retail.

The downside of the home delivery offer is that Fairfax and News will continue to cut costs from the home delivery service – meaning that newsagents will make less and less per paper delivered. Newsagents carry a cost of deals like the Fitness First offer even though they have no control over the terms.

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Newspaper marketing

Our customer service defines us

I heard Neil Mitchell on 3AW this morning talking about poor customer service. The examples Neil gave were from big businesses so I emailed him saying small businesses are champions when it comes to good customer service. He read the email on air and noted that I own a newsagency. He also mentioned the good service he gets from his local newsagent. Well done whoever that is!

It is feedback like this which can help strengthen customer perception about newsagencies and newsagents. We should not be afraid to step up to the plate on talkback radio and elsewhere in the media and remind people of our commitment to exceptional customer service.

Good personal customer service is a point of diffrence we can own.

Kudos to Neil Mitchell for shaming those who provide poor customer service.

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Customer Service

Pushing Stickypoint cannabis magazine

stickypoint.JPGWhen I first blogged about Stickypoint, the Australian cannabis magazine, in January I also wrote to Wrapaway, the distributor. They have ignored my request and sent six copies of issue 2.

I don’t want this magazine. There is no category in my newsagency relevant and it will offend my core demographic. That a magazine distributor ignores my request toe cancel the title and grab another $50.00 of my cash for a few months is appalling behaviour and fuirther evidence of how newsagents are abused by the broken magazine supply system.

Like other newsagents, I want more good magazine titles and less junk.

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magazines

Taking our newsagency carbon neutral

carbon-neutral.JPGIn partnership with easy being green we have become carbon neutral for the next year by purchasing carbon credits. We have also committed to reducing our emissions, improving our recycling program and cutting overall energy use. Through newsXpress we are active participants in a printer cartridge recycling program for our business and for our customers.

By stumping up cash to achieve carbon neutrality for the next year we have put our money where our mouth is. We have also committed to being better citizens. Many of us saw the Al Gore film, An Inconvenient Truth, and have been challenged to reduce the damage we are doing to the world.

We could have quite easily not taken this step – I don’t expect it to generate extra sales for us. It’s not about profit. This is a decision I made as part of our commitment to genuine social responsibility.

While the big end of town gets kudos from Planet Ark, I am pleased to have found a partner interested in working with small business not only in achieving carbon neutrality but also in offering educational facilities so we can make a more practical contribution.

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Social responsibility

Newspaper home delivery challenge over Easter

Some newspaper publishers don’t make easy for newsagents to manage the home delivery process. While News Ltd and Fairfax (belatedly) gave newsagents warning, some rural publishers only announced their plans Easter late yesterday – leaving their newsagents scrambling to get IT systems adjusted at less than 24 hours notice.

The time wasted making these last minute adjustments and printing new one off delivery run lists takes newsagents away from managing Easter trade. And publishers wonder why newsagents don’t comply with their requests.

On an average week newsagents receive between thirty and fifty important communications from suppliers which require action. This is on top of usual communications. Throw last minute notice about handling Easter into the mix and no wonder some newspapers don’t get delivered.

Publishers need to streamline how they communicate with newsagents. Newsagents ought to demand this. The current approach sets newsagents up to fail.

Last year I proposed something I called One Calendar – a common calendar based interface between suppliers and newsagents. Only one supplier put their hand up as interested even though it would have worked with all IT systems and offered an each IT interface between suppliers and newsagent computer systems.

It seems to me that some suppliers prefer to keep newsagents beavering away with archaic business practices.

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Newspapers

Easter eggs and cards

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Easter is an odd season. We’ve had our greeting cards out for a month and they have been selling consistently – we’ve needed extra stock to cover the demand and we should finish the season up 20% on last year. We’ve had our Easter Eggs out for three weeks and sales have really only kicked in this week. It’s been a busy three days. We’ll beat last year but thought going out early we might do even better.

Easter is a great feel-good season – especially when you have access to the well packaged Darrell lea product. The margin is tight but having an exclusive offering makes it worthwhile. I am surprised more newsagents don’t chase the brand. The bright packaging allows us to tell a good retail story.

We’re cracking product open today and giving a small egg to every customer. Saturday is our Easter Egg hunt … hmmm, that could be interesting.

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marketing

Popular AFL promotion

The Herald Sun AFL cards promotion is generating a sales kick of more than 25% compared to last year. Even though there have been some challenges getting stock it’s a good and welcome campaign which drives such a traffic boost to your store. I’m just glad I am not in Adelaide where News Ltd prefers BP over newsagents for such promotions.

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marketing

Do newspapers need to exist?

RealMoney.com commentator Jim Cramersays that lack of financial acumen is burning newspapers:

All of these companies seem to be run, frankly, by jokers or dreamers who had no idea how to deploy capital.

These are diminishing assets. They don’t need to exist. Younger people rarely read them. And the companies acted like they would always be in demand and were simply misunderstood by Wall Street. Nope, Wall Street got it the whole time, except a couple of hedge and mutual funds that are trapped and trying to get managements to do something to bring out value.

No misunderstanding where he stands.

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Newspapers

Business round table for newsagents

I am hosting, through my software company, a series of business round table sessions for newsagents over the next few weeks. These will be proactive and open discussions among newsagents who want to achieve the best from their businesses. Free of politics, I am hoping the sessions will help those participating navigate challenging business issues – come along prepared to actively participate.

The round table discussions are being held prior to user meetings for newsagents using Tower software. Any newsagent is welcome to attend. I promise, it’s not a sales pitch.

The businesses round table starts at 10am (sharp!). The user meeting will start by 11:45am. Locations are: Sydney. Tuesday April 17; Brisbane. Wednesday April 18; Melbourne. Thursday April 19; Canberra. Friday April 20; Geelong. Tuesday April 2; Hobart. Thursday April 26; Adelaide. Tuesday May 1; Perth. Wednesday May 2; Newcastle. Tuesday May 8.

You can book by emailing bookings@towersystems.com.au. We need your business name, the session you are booking for and the number of attendees.

Based on bookings for this first set of dates we will add Cairns, Wollongong, Darwin and Gold Coast next week. We don’t announce all at once as the meetings are expensive in terms of labour, room hire and travel costs and we like to gauge interest in the series.

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Newsagency challenges

Ink and toner race hots up

It’s easier to copy than innovate I guess. Newsagents now have not one, not two but three major ink and toner campaigns running thanks to the launch last week of something called Inktek by the Victorian branch of the ANF newsagents association.

While the competition is healthy and will force the two established players Newsink and newsXpress (of which I am a shareholder) to be more competitive, I question whether it is smart to launch another newsagent connected ink and toner brand in what is a well serviced marketplace. If it were up to me I would guide the non Newsink and non newsXpress newsagents into equally profitable yet unchartered territory.

I know a bit about the ink and toner space having been involved with the original group out of which the Newsink group grew some years ago and having started Inkfast two years ago. Inkfast is a pure online play. It generates fifteen to twenty times more monthly ink and tiner revenue than my newsagency – orders are bigger and involve quite different product. On the downside the margin is slim, hence the focus on volume.

While ink is hot, newsagents are competing with Australia Post, Big W, K-Mart, Dick Smith and Harvey Norman. It is the categories these majors ignore which provide newsagents with better opportunities.

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Stationery

mX free daily newspaper seeks extension of time

The original consent granted for the distribution of mX, the free daily newspaper from News Ltd, in Sydney was for eighteen months. News’ subsidiary Nationwide News has applied to the Sydney Council seeking to modify the development consent to sixty months. Check out the documents available at the City of Sydney website. They list distribution points including newsagent kiosks. The documents make for interesting reading for anyone curious about the distribution of free daily newspapers.

A letter from News’ planning consultants notes that during the current period of consent Council has advised News of only one complaint and that related to litter at one location which was corrected. I am surprised that there have not been more complaints about litter on trains, buses or ferries.

Readers tell me that mX serves its mission well. I don’t find it satisfying but I am not in their demographic. My interest is more in the impact that mX and or any other free daily newspaper might have on newspaper sales in newsagencies, especially given that the same publisher dominates the paid and free channels.

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Newspapers

Another loss making magazine

kitchen.JPGNDD continues to demonstrate their skill at magazine distribution with the scale out of Kitchen Trends. This title has a low sell through and a shelf life of six months. It is loss making for us and, I suspect, many other newsagents.

If NDD were leading the way in magazine distribution, as they claim on their website, the quantity they send and the shelf life would be configured so as to be profitable.

Newsagents cannot afford this behaviour yet they are too time poor to follow up – a situation exploited by NDD in their model.

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magazines

Replacing weekly magazines with a blog fix

The Internet is awash with non mainstream blogs and websites offering entertaining and alternative channels to the Woman’s Day, New Idea, Famous, NW and Who fix. Check out the offerings at The Superficial, Hot Momma Gossip, Perez Hilton, Handbag, MollyGood, Nicole Bitchy, Rope of Silicon, Hollywood Grind … there are plenty more. Just do a search under Google blogs and every gossip fetish will be satisfied.

My point is that gossip is hot online. It generates huge traffic. We (newsagents) rely on similar traffic in newsagencies with weekly magazine sales being the backbone of our magazine category. We ignore the online trend at our peril.

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magazines

High cost phone recharge

Big W offers 10% off for mobile phone recharge. This discount is greater than the commission newsagents receive from Vodafone and what they are about to receive from Optus. I suspect than Big W is on around 16% which newsagents are on 5% and, I suspect, falling.

There are 3,500 newsagent outlets offering phone recharge. If we cannot leverage that footprint and what must be considerable sales for a better outcome I expect newsagents will start to withdraw from offering the service given the considerable infrastructure cost.

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Newsagency challenges

Newsagents miss peace opportunity

I was surprised to see this story in The Australian today about a decision by the board of the Australian Newsagents Federation (ANF) to reject a proposal which could have unified newsagents into one national association by 2009. The proposal came out of a meeting held on March 14 and organised by the ANF.

The Australian story seems to me to have been ‘placed’ – some digging by Sally Jackson would have unearthed a more complete story.

I was invited by the ANF to participate in the March 14 meeting along with representatives of the Boards of the ANF and state based newsagent associations in NSW (NANA) and QLD (QNF) as well as the Chairman of the Victorian association (VANA).

The ANF goal was to seek out common ground with a view to ending years of fighting between the associations.

The six hour meeting involved frank discussion about issues which have seen the ANF fighting the states and vice versa for many years including the challenged of domineering personalities who have ‘led’ newsagents through this time. All participants talked openly and passionately about what they felt was best for newsagents. They remained focused on the goal of what is best for newsagents and the acceptance that bickering serves no purpose.

A common and unanimous position was reached at the meeting and documented in a letter of intent. All attending were confident that their Boards would agree and that at last fighting between the national and state associations would end.

The NANA and QNF Boards supported the letter of intent. The ANF Board decided to not support it, dashing the hopes of achieving unity among newsagents in the short to medium term.

The ANF must now actively compete with newsagent associations in NSW and QLD for members. To win, they must financially harm these newsagent owned bodies. Such a fight does not serve newsagents well. It will result in the loss of hundreds of thousands of dollars of newsagent funds.

The ANF Board, in rejecting unanimous position which was reached at the meeting it convened on March 14, has, in my view, demonstrated that personality politics is alive and well at its Board table as there is no other explanation for the rejection of the letter of intent. It has also demonstrated who controls the national body and it’s not the Directors who participated in the peace discussions.

Between them, NANA and QNF have 1,000 members. The ANF has around 1,750 members. Bringing the NSW and QLD members into that group immediately would provide the ANF with greater strength in negotiations with suppliers. The cost of this weakness will be felt by newsagents for years to come.

This is the story I would have liked to see run in The Australian today.

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Newsagency challenges

The future of books

The Economist has an excellent article on the future of books. It’s written against the backdrop of the Google book project which sees the company digitising 3,000 books a day from one university library alone.

The article draws parallels with music and that the album had died in favor of the song – people can purchase and listen to what they want as opposed the a complete package. I think there are considerations here for magazines and newspapers where single articles may be more valuable to some readers than the whole printed product we know today.

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Newsagency challenges

Construction noise turnoff

Noise from the construction for the new Target store next to my newsagency is making the back room an unsafe workplace and the shop uncomfortable for customers. I’ve sent the landlord these two recordings from Saturday from the two locations: inside the shop and the
back room.

The landlord promised that the work would be completed by 9am each day – it’s continuing until mid afternoon six days a week.

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Uncategorized

Sat nav giveaway stirs magazine sales

Jane and Damien have papered our entire display window with posters and put two small black ‘gates’ in front, guiding people to peer in and see a satellite navigation device lit up – it’s the prize on offer in a magazine promotion we are running.

sat-nav-window.JPG

With so many promotions visually noisy we decided to pare this one back and make the prize the star. Each magazine purchase results ina coupon for our customers. It’s stirred some good interest.

We were given the satellite navigation product by a supplier as a rebate for purchases.

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magazines

Sophie Randall Cards and Gifts – one week on

Our Sophie Randall start up card and gift shop is a week old this morning. While we are yet to undertake any marketing or even hold an opening event, sales are strong. We took in our first week 80% of what we budgeted for weekly takings three months in. So, the signs are good – but we don’t want to get ahead of ourselves.

The experience behind the counter in this 100 square metre shop is very different to what we experience in the card and gift space – shop within a shop – in our newsagency on the floor above. Here in Sophie’s space customers are friendlier, they take more time, they’re happy to wait to be served. In the newsagency if there is a line (which we don’t like) it is not uncommon for customers to let us know they are annoyed – usually over a $1.10 newspaper purchase.

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Beyond happier customers, we are surprised at the products which are selling. $49.95 paperweights for example, cows, Beatrix Potter product and high price point cards. We knew the products would move but not in the numbers achieved in the first week. There are some categories we expected to do well which have not moved at all. But, as they say, it’s early days.

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As we move between the two stores we have to change our mindset. In Sophie’s place we’re in control, not one supplier is dictating rules to us – we choose the products, pricing and how we display. In the newsagency, for two thirds of what we sell, suppliers are in control of range, price point and, often, how we display. I am not complaining about this but, rather, observing the difference between the two.

Suppliers often complain that newsagents are lazy, don’t engage with campaigns and are not ‘compliant’. Associations complain about this too. My view is that this comes about because of the rules suppliers impose. They train newsagents to NOT think for themselves and then complain when they do what they are trained to do. While newsagents can be entrepreneurial, it is a challenge with so many rules to live by.

In the meantime, we’re enjoying navigating the freedom of the Sophie Randall playground.

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Greeting Cards

Servo savers chasing newsagents

Servo Savers seem to be chasing newsagents to join their loyalty scheme again. When they approached me in 2005 I was turned off by the aggressive tactics used by the person representing their company. They said all manner of bad karma would fall on my business by saying no since they were about to such with some big retailers in my centre and I would be locked out.
Two newsagent colleagues have told me of approaches to them in the past week – both along similar lines. One said the pitch was quite threatening.

It makes no sense to reward customer loyalty in my business by sending those loyal customers elsewhere for their ‘reward’ – especially when that other business sells products I sell. I prefer to reward loyalty in my business with more genuine rewards in my business. Besides, every man and his dog offers fuel discounts.

In checking out Servo Savers this morning I found this story from New Zealand about disgruntled Servo Savers customers. I also found this ad offering $150,000 for a sales person for the company. This demonstrates why participating is expensive for small business – they pay a lot to their member acquisition team.

If a newsagent asks me about Servo Savers I suggest they develop their own in house loyalty scheme which drives customers back into their business. The magazine club card I run in my newsagency is a good example of this.

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Customer loyalty

$21 million superdraw traffic surge

The $21 million lottery superdraw (megadraw in some states) looked like being soft but then traffic increased Wednesday. Yesterday it was up further and today has been excellent. It still baffles me that non lottery newsagent suppliers do not provide tie-in product to push at the times of these traffic surges. We have our own promotions but would prefer something more national.

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Lotteries

Green green green

Today’s Sydney Morning Herald is printed on green paper. I’m surprised they did not green up the website as well. Time magazine on Monday publishes a special Earth day issue. Sydney tomorrow night turns off the lights for an hour – Earth Hour. Newsagents in NSW especially could leverage all this activity in around the various titles and products which relate to global warming and climate change and demonstrate relevance on such an important topic.

I’m in Canberra today and was disappointed to see the green Sydney Morning Herald being treated at the airport Newslink store no different to usual.

Newsagencies are small and, mostly, local businesses. We need to demonstrate our local credentials by connecting with local issues. Okay, airport stores are not local but on this issue I expected to see some effort.

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Uncategorized