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

Author: Mark Fletcher

Bill payment sales game for newsagents

At my software company we use sales games every year or two to reinvigorate sales and those who manage the sales process. Conducted right, sales games are a win for all concerned. I’m pleased therefore to see that Bill Express is using a sales game to enable newsagents to win back the cost of the recent BOPO debit card in store training. I like the idea because it reminds newsagents about the importance of bill payment and gets them thinking about this and BOPO in entrepreneurial terms.

In the Bill Express bill payment sales game, the bar is not too high. It’s built around newsagents engaging with their customers a little more to increase bill payment transactions. In return, newsagents win a rebate of the cost of BOPO training – a good commercial solution to an issue newsagents would have thought was lost.

I need to declare that I was one of the people Bill Express consulted in navigating this issue as a result of comments here.

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Bill Express

Magazine twins

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The Windows XP magazine on the left is published locally and distributed by Network services. It sells for $14.95. The Windows XP magazine on the right is published in the UK and distributed by NDD. It sells for $19.95.

That these are the same magazine, have different prices and come from different distributors demonstrated how broken the Australian magazine supply model is.

We have early returned the NDD product today. It’s a topped return meaning we rip the top off and post that back for the credit. This would make the publisher / importer happy if they found out that their stock never made it to our shelves and that they cannot sell the returned product elsewhere.

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magazines

nook mixes local with bloggers, community and citizen journalism

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I opened my local Leader newspaper last night to see page this Page 10 story about nook.com.au a new community and blogging site from Leader Newspapers. The pitch in the article says it all:

For Leader, nook.com.au squarely targets keeping people engaged at a local level.

This is what a local newspaper is all about. From my test drive I’d say nook delivers the goods. It’s easy to navigate and brilliant at connecting people. The site design is simple and appealing to first time bloggers.

Beyond connecting people and providing the community with another online voice, nook will provide Leader Newspapers with material for its print product. On many fronts nook looks like a winner. It’s part blogging, part community connection, part citizen journalism and part commercial. And, no ads – but I would like transparency on what makes something featured.

News Limited should be well pleased with their new baby.

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Citizen Journalism

Online music sales double

RECORD LABELS HAVE SOLD AN estimated $2 billion worth of music online or through mobile phones in 2006, doubling the previous year’s sales and accounting for 10% of the total music market, according to the International Federation of the Phonographic Industry’s Digital Music Report 2007. Read the whole story at Mediapost.

This story is important to newsagents for two reasons: recharge business has not peaked yet – sales of recharge for products like iTunes, BOPO will grow and need to ensure we can service this efficiently and for an equitable return; also, the disruption which has hit music will hit publications. Consumers have demonstrated they want what they want and not necessarily the extras surrounding what they want. i.e. they want a song or to but not always the whole album.

Consumers want stories and not necessarily the whole magazine or newspaper package. TV, Radio and music have been broken down. Aggregating product have been replaced by single songs, single shows and even individual stories from TV shows. This will happen in the printed space.

By planning for these changes newsagents can build business models which serve well into the future.

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Media disruption

Giving it all away, web 2.0 philanthropy

Bill Gates, Richard Branson and Warren Buffet grab the headlines when they give away billions of dollars. Lesser mortals get no coverage for giving away clothes, furniture and other things they no longer need. They probably don’t want media attention for their generosity.

Everyday philanthropy is important to any society. While we can leave our bags of clothes and other items in dump bins in car parks or at the door of the Salvation Army, Goodwill or other charity organisations, there is nothing quite like giving something directly to someone who will benefit from the gift. One to one philanthropy.

At Find It we want to help you do that, we want to help you give things which, you no longer use or need, away. It’s part of our contribution to a better world. I’d call it web 2.0 philanthropy.

We have introduced free listings at our Find It website. We want to connect people with things to give away with people in need. The only rule is that the transaction is free – it has to be a genuine gift. Under Available and Wanted you can describe the item, include photos and provide your contact details – all free.

While Bill, Richard and Warren will continue to get the headlines for their efforts, its individuals who can touch lives through personal one to one giving.

I posted this earlier today at the Find It Blog and re post it here because of the different readership community

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Social responsibility

Art Sale beats Back to School

We missed the deadline for placing our Back to School order with GNS so rather than pay the full price they wanted for catalogue items we decided to skip Back to School altogether and run with an Art Sale.

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Back to School is not big for us given our demographic – retirement villages and the Neighbours film lot – and given the huge push from Big W in the centre and Officeworks nearby. We’re finding having the Art Sale offers a point of difference. The mistake on our part has not hurt us as much as we expected.

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Newsagency challenges

Find a newsagency at Yahoo

Go to Yahoo, type in newsagency and click search. Number 5 out of 191,000 entries found is the Beechworth Newsagency ad at Find It. Vaughan Lawrence placed the free business directory ad a couple of months ago and now it’s ranked 5 out of 191,000. Any newsagent or any business for that matter can have a similar free business directory entry including photos. This ad has been viewed 362 times. Some of these views will be from people who had never heard of his business. It amazes me that more newsagents are not taking up the opportunity of free online ads at Find It.

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Online classifieds

Australia Day newspaper bumper edition frustrates newsagents and customers

I’ve heard that Fairfax in NSW will publish a ‘bumper edition’ Sydney Morning Herald on Friday January 26 and to be on sale for the entire Australia Day long weekend for the usual Saturday price of $2.20. I would have thought that in the current newspaper market – challenged at best and decaying at worst – Fairfax would do everything possible to not upset customers. Their customers will be upset by yet another lazy Bumper Edition. Newsagents will bear the brunt of customer anger. Talk to any newsagent and they will tell you of the frustration expressed across the counter and on the phone explaining the pricing and the convoluted rules associated with the Bumper Editions this past Christmas. Bumper Editions are not good customer service.

Everywhere you turn there are reports of sales declines being experienced by newspapers. Newspapers themselves are regularly running naval gazing pieces about their own future. Publishers like Fairfax have invested hundreds of millions of dollars in online businesses which are speeding the decline. It is odd to me therefore that Fairfax would ‘play’ with their customers in this way. If they want to delay the decline they would publish each day of the Australia Day weekend. But then, maybe the financial return is better if they run a Bumper Edition and that’s more important than what the customers want.

Memo to Fairfax: You might want to let the computer companies know about your Bumper Edition plans so that they can provide advice in advance to their newsagent clients and thereby save the hundreds of phone calls which would be made otherwise.

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Customer Service

Hooked can fish elsewhere

hooked.JPGWe have returned Hooked to NDD without putting it on the shelf. At $29.95, with a shelf life of four months, requiring two display pockets and with our fishing category already well stocked there is no room at the inn for this baby.

We need a magazine czar who decides which titles have access to the newsagent network. Currently, publishers shop the three distributors until someone is prepared to take the title on for the right fee. We are foolish enough to give them our real-estate and labour for free.

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magazines

Delicious magnets make us happy

delicious-mag.jpgI bang on here a bit about the items publishers use to promote their titles and which are often not retail friendly. This month Delicious has a great offer with the magnets shown in the picture packaged with the magazine.

Retailers are happy because the magnets present no display challenges. Customers are happy because the magnets are good value.

So, well done to whoever at Delicious is responsible for this idea.

We’re especially happy in my newsagency because we received an extra 10 copies by mistake and we usually sell out. (Yes, we let the distributor know.)

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magazines

Alpha joins the breast pack?

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Maybe it’s just this issue but Alpha seems to be positioning itself more in line with FHM, Ralph and ZOO. The blokes on the cover for the past year have worked well with the magazine usually selling out. If we see more covers like this I think sales will fall.

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magazines

Magazine oversupply complaint lodged with ACCC

Here is the letter I sent yesterday to the ACCC detailing my unconscionable conduct complaint against NDD. I have documented what I consider to be irrefutable evidence of supply and return data for Bargain Shopper magazine from the last fourteen months, data which has been ignored by NDD in the making of their latest scale out decisions for this title:

On December 21, 2005, NDD supplied my business with 64 copies of the 2006 edition of Bargain Shopper. We returned 34 copies: 28 copies on January 12, 2006 and 6 copies on June 7, 2006. On February 8, 2006, NDD supplied us with 40 copies of the same 2006 edition we had earlier returned. We subsequently returned 30 of these: 14 copies on April 12, 2006 and 13 copies on June 7, 2006. On August 25, 2006, NDD supplied a further 29 copies and we subsequently returned 18. In broad terms this represents a sell-through (success) rate of 38% for 2006. Once we allow for theft, the success rate falls to close to 34%.

On January 10, 2007, NDD supplied my newsagency with 75 copies of the 2007 edition of Bargain Shopper. Given the access it has to sales data, NDD would know that it would be unlikely that we sell any more than 30 copies of the title through the entire forecast on-sale period, even allowing for some growth.

The supply of 75 copies on Bargain Shopper accompanied by a requirement that they are held for eight months is, in my view, unconscionable conduct under section 51AC of the Trade Practices Act 1974. I say this because NDD consistently oversupplied long shelf titles like Bargain Shopper with the full knowledge that my business will sell less than half of what they supply.

Section 51AC of the Trade Practices Act 1974 sets out several factors a court can consider in deciding whether conduct was unconscionable. The ACCC website advises:

Being taken advantage of in a transaction in a way that offends the conscience is known as unconscionable conduct.

Does it offend the conscience that NDD supplied me with such quantity of Bargain Shopper that I will lose money? Yes! Does NDD do this for other titles? Yes! Will NDD offer to fix this? Yes! Some time after fixing this will NDD revert to their old practices and oversupply? Yes!

I could have supported my complaint against NDD with evidence relating to many more titles. I felt it appropriate to start with one. Depending on the response from the ACCC, I may add more titles.

It would be easy to turn a blind eye to the oversupply by NDD as many newsagents do. Sometimes it is too stressful thinking about the tens of thousands of dollars in magazine stock sitting on the shelves waiting to be returned some time in the future. My view is that unless newsagents take a strong stand we will continue to be treated as we are. We ought to be proud of our businesses and the benefits they provide publishers and magazine distributors and we ought to price ourselves accordingly.

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magazines

Magazine browsing made easy

madison-counter.JPGWe’ve taken the stand supplied to us by ACP to promote their 600 page COOK cookbook last year and turned it into a magazine browsing stand. It was a logical move – we noticed that COOK was browsed regularly so rather than trash the well designed and made cardboard stand we thought it could work with the right magazine titles.

We have started with Madison as shown in the photo and will move on to other titles which work with the red colour and lend themselves to the browsing experience. Also, with women more likely to browse at our counter than men, we will focus more on fashion and food titles. Oh, and we will only use the stand for monthlies – we don’t think it’s right for the weeklies and they are well promoted elsewhere. Also, promoting monthlies better reinforces out point of difference.

If this works for magazines and leads it a measurable increase in sales the next step will be to see if we can make a more permanent unit with a slightly smaller footprint.

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magazines

ACP and APN in online joint venture

Another day another old media company investing more in online business. Scoop NZ has the ACP Media release. Here are the highlights :

ACP Media Limited (‘ACP’) and APN News & Media Limited (‘APN’) have entered into a joint-venture to develop the free online general classified site http://www.sellmefree.co.nz.

ACP and APN believe that free, live and multi media rich trading environments will be an important part of the future of buying and selling general merchandise for the private individual.

The joint-venture brings immediate benefits to sellmefree.co.nz including: • accelerated development of the product offering including a free auction service and enhanced multi-media and live functionality; • a significant investment in marketing; and • a major increase in private listing content from print assets in key population centres.

“The proposition for private sellers expecting to sell general goods for free with photos and videos, and for buyers to be able to buy right now is clearly gaining ground. This trend is backed up by over 300,000 registered sellmefree.co.nz member accounts currently”, says Heith Mackay-Cruise, Chief Executive Officer of ACP Media.

Newsagents need to ask themselves what connection they have with online business models. Last year my company offered newsagents access to revenue from our Find It free online classifieds business. 800 ended up registering with us. 400 have signed contracts. Less than 100 have actually engaged with us in our beta release marketing activity. Unless newsagents act soon, online revenue will be lost to them and they will have to rely on print only.

What ACP and APN want to bring to sellmefree already exists in Find It. If you have something to sell or give away advertise it free at Find It. Help us provide competition for these big media companies.

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Online classifieds

Explode magazine still popular

Searching for Explode magazine on Google lands more people at this link on my blog than searches for any other magazine title. Huh! Explode magazine is the short lived magazine aimed at teen boys from Pacific Magazines. Every week or two I receive an email asking where old copies of explode can be obtained or whether there is a website. I’m surprised the website did not continue – now, www.explode.com.au takes you to the Total Girl website – further frustrating those interested.

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magazines

Loving customer service

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When Ben Kay, manager of my newsagency, sold “Zelda” a syndicate entry in the $33 million superdraw they got to talking about what they would buy if either won a major prize. Ben’s dream purchase is a fast boat. “Zelda” promised to buy it for him if she won. Similar conversations are shared across newsagency counters every day. It’s a level of personal and friendly contact which is rare in retail. It’s non existent at mass merchants.

“Zelda” didn’t anything in the superdraw but she wanted to encourage Ben to keep dreaming. She brought in this envelope to the shop with a couple of photos of boats and the message KEEP ON DREAMING “MAN”.

I’m glad we have people like “Zelda” as a customer. We enjoy her company.

I hope the Victorian State Government considers the personal service newsagents offer when they contemplate changes to lottery licencees this year. I can’t imagine “Zelda” being happy about having to buy her lottery and scratch tickets from the supermarket.

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Customer Service

Lottery counter integration

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I’ve had some great feedback here and offline about my post yesterday about integrating the sales counter. This photo shows part of the story at our counter – the placement of a point of sale register between two Tattersalls terminals. It means we can sell anything from the Tatts points. This helps us include products at the Tatts counters and be able to sell them from there. We’ve had success with magazines, pens and some gift items at seasons.

The register, along with the other two point of sale registers at the counter, allow us to track all Tattersalls sales and thereby measure the efficiency of Tattersalls product to the business overall. We can tell how many times people buy Tattersalls product and nothing else as well as what they do buy when they buy other items.

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Lotteries

Small business policy failure

ap_jan07.JPGThe Government owned 863 Post Offices have launched a stationery sale using this flyer. Nowhere is it promoting postal products. This flyer directly targets small business newsagents who rely on back to school / back to work promotions to kick start stationery sales for the year.

It is offensive that this Government owned business so aggressively and relentlessly targets small businesses in this way. It is even more offensive that the Minister responsible, Senator Helen Coonan, refuses to even talk about the millions of dollars in sales Australia Post is ripping out of the newsagency channel. Instead, she responds to queries with letters way off topic. My last letter still awaits a response.

My newsagency is directly opposite a Government owned Australia Post shop. They are taking stationery sales from us. They do this by abusing their monopoly privilege around postal products and promoting traditional newsagent stationery lines. I do not have exclusive traffic to leverage off. I do not have their marketing budget. I do not have a government protecting me.

For all its bluster about deregulation and competition, when it comes to Australia Post the Government is looking after its mates.

Newsagents, their families and their employees are the losers as a result of Government failure on small business policy.

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Australia Post

Fairfax and News acquire online businesses

Courtesy of Andrew Pascoe’s under the rotunda Blog I found out that News and Fairfax have been buying another online business each:

News Digital Media has purchased Moshtix, the online ticketing business where patrons use their mobile phone as the ticket to enter events.

Fairfax Digital has bought Essential Baby, a parenting website.

While publishers have spent hundreds of millions acquiring online revenue streams, newsagents are yet to spend a cent. Am I alone in seeing a problem here for newsagents?

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Media disruption

Seller beware, maybe the buyer is not that interested

Several newsagents report being approached by business brokers looking to buy their newsagency. Upon suggesting they would be interested to talk further they are presented with a confidentiality agreement which is very skewed to the buyer.

If you are approached to discuss possibly selling your newsagency DO NOT sign any confidentiality agreement without getting independent legal advice first.

I have seen a situation where someone purporting to be interested in purchasing a business used this as a cover to find out more about the business so they could acquire the lease and pay nothing for the business.

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Newsagency challenges

Size does matter to the big American book store

A big book store put up a sign crowing about having 3,000 magazine titles in stock. The newsagent put up a sign saying they had more than 3,000 magazine titles in stock. The manager of the big book store complained to the newsagent saying the sign should come down. Hmmm, yes, it should come down. How dare a newsagent tell the truth that they have a better range of magazines than a US bookstore chasing after Australian small businesses?

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Newsagency challenges

Imported magazines out of date

import.JPGWe received stock of this issue of Crafts Beautiful on January 3, a week after Christmas.

Like many imported titles with a seasonal theme it can be out of date by the time it arrives in the shops.

While I like the point of difference stocking such titles offers newsagencies, it makes the shop look lazy to have such Christmas stock on the shelves.

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magazines

Integrating the newsagency sales counter

Newsagents need to take back control of their counter. The counter is the busiest part of any newsagency, the key profit generator, yet in many newsagencies it is suppliers who are in control. Lottery companies, magazine publishers, just about everyone, wants in on the action. They want their stands, display units and products at the counter. So much so that in an average newsagents the counter is mess of mixed messages.

Reclaiming the counter should start with the lotteries area. Lottery companies like a defined part of the counter where nothing but lottery product is sold. They tend to prefer the best counter location. It means customers wanting lottery product can make their purchase and leave – without being tempted to purchase other items. It also means that customers purchasing a newspaper, magazine or some other product are less likely to be tempted with a lottery product purchase.

I am all for integrating the counter, mixing lottery sales points and regular register points and merchandising the counter appropriately. A properly integrated counter, against the rules of some of the lottery organisations, should increase sales of lottery and non-lottery product.

In integrating the counter newsagents ought to focus on higher margin repeat business, thereby building the business so it can weather a downturn in newspaper and lottery sales – both categories of products are being impacted by online developments and are the top two traffic generators for newsagents. In other words, newsagents will be hit hard if/when traffic and sales from these two fall.

By leveraging existing lottery and counter traffic with an integrated counter, newsagents can start to reposition their business and re-educate customers about their offering. This is exactly what publishers are doing with their online and free models.

While some lottery companies will resist the integration I propose, newsagents need to put their business needs first.

Today we have great traffic, among the best in the country. By acting now and leveraging that more efficiently and across a broader range of better GP product at the counter we can weather generational change.

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Lotteries

Newsagents worried about free daily newspapers

The Sunday Herald in Scotland has a story about the possible impact of a recently announced free afternoon newspaper on newsagents. The UK newsagent association (NFRN) is holding meetings of members and with the publishers to discuss the lost of sales and customer traffic caused by free newspapers.

As data from Dr. Piet Bakker – published here just a few weeks ago – shows, free daily newspapers are growing. Even though Australia is behind Europe and the US, they are gaining traction. These free dailies provide publishers with an easy sell to advertisers and are being used in many situations to boost advertising sales for the paid for product. It makes sense. In Europe especially publishers have been very successful maintaining revenue through by launching free daily newspapers.

While it’s natural that newsagents will complain to publishers about the impact of these free newspapers, my view is that our energy is better spent expecting the move and adjusting our businesses today accordingly. Free newspapers are not new, we have seen them growing for the last five years. This is change we can prepare for today. Indeed, it is change we ought to have been preparing for long before now.

We need to rely less on newspapers for traffic and revenue. This means we need to build traffic from other categories. It also means we need to adjust the layout of our businesses and focus on higher margin traffic generating product toward the front of our shops. While publishers will resist such a fundamental change – given that newspapers have always had the best location in our shops – they need to allow us to respond to market trends just as they are through acquisition of online businesses, moving their product further outside the newsagent channel and by launching free newspapers.

The newsagent channel in Australia was created by publishers to serve their needs. In 2007, newsagents must put their needs ahead of publishers. Tough decisions face us and we must be businesslike and swift in making them.

For the record I am not advocating that newsagents get out of newspapers, rather that they invest real estate and labour in newspapers according to their anticipated return to the business.

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Media disruption
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