3LOVES, our free online dating site has attracted 500 profiles in two weeks since beta launch. 3LOVES is one of four social media offerings which are part of the Find It online classifieds and directory we are launching in partnership with newsagents.
Take 1,000 IT people involved in online businesses from around the world – from developers to venture capitalists – and you’re bound to get reality checks on a range of fronts. Le Web 3 brings these people together in formal conference sessions, informalk networking and a fascinating, compelling and intimidating start-up room. I’m here learning for the Find It online classifieds business being rolled out in partnership with newsagents. But there are more take aways than those which relate to Find It. Here is a summary of my key take-aways today.
First up, every second attendee is sitting in the conference hall laptop open and reading and writing during the sessions. More male than female. I’d guess the average age at early 30s.
Newsagents are getting left behind. I know I go on here like a cracked record about this but you onle have to come to a conference like Le Web and see how disconnected we are with the new worl in our bricks and mortar businesses. We must get this to survive.
They are generating content as they go – participating in live and relevant polls which speakers comment on from the stage.
Newsagents have no conection with the world of user generated content.
We’re hearing that user generated content is key. Quality content. A chap from yahoo said driving quality content was the holy grail. But then he said that while there;’s crap at YouTube, that there is some quality makes the site compelling.
The newspapers and magazines we sell in newsagencies deliver, in the main, quality content. There’s some, short term, comfort in that.
There was talk of a big impact of Web 2.0 on middlemen and in particular TV networks. IPTV is about connecting content producers with consumers. The TV stations are the losers in this. Consumers are proving they want content where and when they want. TB networks work against this. In an IPTV world the TV program is replaced by an a la carte menu.
Newsagents are middlemen for the most part. We make money from selling product people can get individually elsewhere. We need our own reasons to exist.
Free is the game in town. Free broadband. Free online software. Free content. Monetisation comes from advertising and other less obvious revenue models.
If you look at the change in newspaper cover prices in Australia over the last ten years compared to the change in advertising rates over the same period and you can see that publishers agree. In real terms, Australian newspapers sold in newsagencies are closer to being free today than ten years ago. Niche titles – foreign language newspapers – price their product as if the content is valuable.
More than this has been covered so far but I’m not about to blog about take-aways which will benefit Find It and my other businesses.
So far Le Web 3 has been exciting, challenging and very enjoyable.
One other surprise today looking at how newspapers and magazines are sold in Paris is the lack of rules. Here’s a foreign newspaper stand at one of the Presse kiosks – it’s easy to browse. The local dailies are close to the counter with the full cover viewable. Back in Australia we have all sorts of rules – how close to the front of the shop, the type of stand to use, the amount of space to give etc. Sometimes these rules get in the way of our customers. Here, with newspapers especially, it’s about easy access.
Here are some random retail-related observations from a day wandering around Paris.
Pharmacies are everywhere and well branded.
Starbucks is almost non-existent.
McDonalds is almost non-existent.
I don’t think the French send greeting cards – I could not find one card shop and I sure covered some ground.
Stationery is also hard to find – I saw two bookshops with reasonable ranges.
Shops are closed on Sunday. So much for us thinking the world will come to an end of we don’t open on Sundays.
These are the most common ‘newsagencies’ on the streets of Paris and suburbs from what I have seen today. These ‘kiosks’ are efficient – they allow for the display, Parisien style, of 250 magazine titles, all major dailies and another 20 or so imported newspapers. They also offer tobacco, candy and, in some cases, calling cards. Newspapers, magazines and tobacco products account for 80% of all sales. High street newsagencies have not been forced to retreat to these kiosks – I’ve been told this is how it’s always been for the sale of newspapers and magazines. It’s certainly efficient. These Presse kiosks are everywhere.
Seeing so many Presse kiosks today made me wonder if we (newsagents) have got too greedy. Have we taken on operational costs which in turn have forced us to broaden our product range – for which we take on more costs? By staying small these French ‘newsagencies’ have contained costs and remained at the hub of street traffic.
By pursuing a shopping centre tenancy for a newsagency we immediately fix the business with a $200,000+ annual rental cost. Add labour of between $150,000 and $200,000 and you have a newsagency with some challenges. I wonder whether a kiosk selling the top 200 magazines, newspapers and some candy would be more profitable. Of course, landlords will have none of that. They want newsagencies as in-line tenancies to draw traffic for other stores nearby. Unfortunately, they are not offering rental terms which respect our tighter margin compared to others. So, if we are greedy in chasing revenue it’s because the circumstances demand it of us.
The other party in our size is magazine publishers and distributors. They created our channel in the 1800s and for the years since have relied on us to provide a cost effective distribution channel and free retail real-estate. They’d choke if we said we would only stock the top 200. The reality is this will happen unless we are paid to carry titles outside the top 200 which do not pay their way.
Off the main thoroughfare and tucked into small spaces of between 20 and 30 sq metres are these presse shops – newsagencies French style. I’ve been into five so far an their range of magazines is excellent – at least 800 titles. In a fan type display along shelves – no full face displays here, not even for the high volume titles. Their lottery products take up much of the counter with tobacco products behind the counter. No stationery. No greeting cards. They don’t have room – each of the shops I have see so far is tiny. If I had paid more attention during French classes in high school I might have more to say about their trading terms. One owner I spoke with said “business no good” but his wife then jabbed him as if to say he always says that. What has been consistent is their shingle PRESSE is bold and clear atop each one.
Partworks are popular here in France. I took this photo of one issue of a Mr Magoo partworks which republishes the 1960s TV Series. It’s a title I never expected to see as a partwork series. But now that I think about, there are plenty of series from this era which would sell. Maybe we will follow Europe on this like we do so many other partwork titles.
The shop where I took this photo had all partworks displayed in one of its windows. While the display itself was mediocre, that they were displaying the range in the window is something we don’t do for partworks – mainly due to the type of marketing collateral we receive for the titles.
Partworks are a pain for newsagents because of supplier problems. But I wouldn’t be without them – they are exclusive to newsagents and that helps offset the supply consistency problems.
I arrived in Paris this afternoon and the first business I happened to see was La Poste, the French Post Office. This one I visited sold stamps and postal products. No books, calendars, cards, soft toys, wine coolers, picnic sets – none of the items which Australia Post and the Government seem to think are essential to Australia Post’s operation.
Further to this post – from sales of New Idea three weeks ago (the Belinda Emmett feature) and some additional funds of our own we have forwarded a cheque for $500.00 to the McGrath Foundation. Our customers have let us know they like participating in these practical and news related fund raising efforts.
To recover sales lost this week when the current issue was pulled from sale due to a production fault, next week’s That’s Life comes out Monday – two days earlier than usual. Based on comments across our counter, customers will be happy. One consequence of That’s Life being unavailable is a lift in sales of Take 5.
We used the That’s Life real-estate by moving in some Lovatts crossword and puzzle magazines which are usually in another aisle.
I am noticing that imported magazines with a Christmas themed issue sell better at this time of the year. Ben Kay, our Retail Manager is driving this by grouping all such magazines together. As a result overseas craft and home entertaining magazines are generating above average sales. I hope this doesn’t mean our rest of the year supply is increased.
A colleague newsagent recently purchased a gift pack of Cocky Circle children’s books at the local Australia Post outlet. The pack contained five books and a library bag. Newsagents used to sell these – they were very successful – until Murdoch Books withdrew them from sale in newsagencies three or four years ago.
Murdoch Books advised my colleague that Cocky Circle children’s books are printed and packaged for Australia Post as a special supply and that there was no plans to reprint any of the titles to sell to anyone else.
My question is – how is this permitted under the Postal Act?
December 5, 2006
Hon. H. Coonan
Minister for Communications, Information Technology and the Arts
Parliament House
CANBERRA ACT 2600
Dear Senator Coonan,
I refer to the November 23 letter from Natasha Maclaren-Jones, an Assistance Adviser in your office, responding to my letter to you of September 26.
Ms Maclaren-Jones has done little more than find a vague off-the-shelf letter spinning about Australia Post and typed in my name. She has not responded to my letter.
So that you may not claim an AWB style defence, I ask that you revisit my September 26 letter.
It is important that you know what your policy in relation to Australia Post is doing to small business. It is important that you know how Australia Post is interpreting the Act you passed to serve its profit purposes, and therefore the Government’s, by taking revenue from small businesses like mine.
Every day, at newsXpress Forest Hill, we battle with a Government owned Post Office for the sale of items which until a few years ago were not sold at your Post Offices. Now, thanks to the power of the postal brand and their monopoly on postal products, you are landing customers in your shop for a fraction of what I can land them in mine.
In 1999, your Government facilitated the deregulation of newsagencies. You took away our exclusivity and allowed others to cherry pick our top selling magazines and newspapers. As a result, newsagencies like mine have been left with a supply model which is fundamentally flawed and a significantly higher customer acquisition cost. Your deregulation has left newsagents severely disadvantaged.
I agree that deregulation of the supply of newspapers and magazines was appropriate. However, since you did not put in place any review process, you do not have data to show what a mistake you made and how much you have hurt this small business channel. Good governance requires you review the impact of such significant deregulation on the 4,600 family businesses affected.
Australia Post has seized on the deregulation you brought about and now your Government is profiting from these regulatory changes.
I do not want you to have an AWB defence when newsagencies close down or go broke.
I do not want you to be able to say “I was not advised about thisâ€. This letter and my earlier correspondence advises you.
Deregulation of newspaper and magazine supply, while necessary, went too far and left newsagents with a model which burdens us with costs far greater than our competitors.
Australia Post is selling products which fall way outside what is permitted under the Act. Their Last minute gifts catalogue, which was released yesterday, provides proof. I have enclosed a copy for your information.
Australia Post is looking more like a newsagency every day. Newsagents cannot compete because we do not have the exclusive postal product which drives people to Post Offices. Australia Post is abusing its exclusive postal products and government ownership to the detriment of small business newsagents.
These are policy matters and go to heart of the Government’s small business credentials. I urge you to act for your small business constituents and not just the an enterprise the Government wholly owns.
Sincerely,
Mark Fletcher
Director
Springfield Consulting Pty Ltd trading as newsXpress Forest Hill
The That’s Life recall today was an ideal opportunity to compare the compliance of newsagents with supermarkets. Newsagents I spoke with had it off the shelves from early morning while some supermarkets reportedly were still selling That’s Life at lunchtime. Newsagents are often told we/they lack compliance yet here is an example of them leading the way. We should be proud.
Sally Jackson, writing in The Australian today, in a story about ANF CEO Rayma Creswell withdrawing her resignation, reports on my study – The Cash Flow Impact of Magazines in Australian Newsagencies. Do a search in the archives of this blog on magazine cash-flow and you’ll find several postings about what the study revealed. By marrying hard evidence of an unfair magazine supply model with robust representation, newsagents can expect to see progress on this problem. The challenge is to get newsagents engaged to provide the evidence they have in their businesses of this problem.
A year ago I declared in this place that calendars are stuffed. Today I am writing to say that I was wrong. Well, sort of. Last year, we went big on calendars and encountered early discounting in our centre with a Calendar Club (from the Angus & Robertson group) outpost. This year, we have a more modest range and no Calendar Club outpost. Last year we had to discount from late October to be competitive. This year, we are still selling at full price. Revenue from calendars so far this year is up more than 25% on last year but with only 33% of the range. We will sell out and probably without discounting at all.
The calendar space we have not entered is the one taken by Australia Post from newsagents – the Steve Parish and similar scenery based calendars.
Learnings for us have been: choose your range carefully, don’t be greedy, display product with the consumer in mind and make an informed decision about whether to outpost or not. We have been fortunate to have access to Michelle Caia, the calendar category manager from newsXpress, who has guided us this season.
So, are calendars stuffed? Sort of. I know of some shopping centres where heavy discounting means no one is making any real money. This cannibalisation of what should be a strong category through Christmas is nuts.
The campaign started by the Sunday Age and maintained with solid coverage this week to build support for bringing David Hicks home is gaining traction with readers – a couple of customers mentioned it today, saying they had emailed support to the newspaper as requested. It’s campaigns like this which are important to newspapers. Sure they polarise – but they also show a heart and help drive a story.
Hover over any link in the blog and see a snapshot of the site. I discovered the facility through Online News Squared.
Two ladies at our counter on Saturday reminded me of the difference between an independent small business retailer and a mass merchant. They put a smile on my face and the faces of those around me including other customers who watched as they played with and giggles at these stamps which light up when you press them down.
These ladies, in their seventies, were taken back to their childhood and recounted stories about Christmas. Even though our counter was busy they were in their own world, enjoying feeling good about Christmas and that we let them play with all the stamps to find the ones they wanted.
While a couple of Scrooge like customers frowned because they had to lean over the ladies to pay for their newspaper or some other purchase, most were happy to see them happy. Their playing led others to purchase the stamps but that’s not the point. In hindsight we could have moved them on, pressured them to buy or shifted them from the counter. It never crossed my mind. I was delighted to see their delight and proud we had something which made them so happy.
They told us a couple of stories we would have otherwise not heard and that’s what this is about, it’s what independent retail is about. It’s not merely a transaction. Independent retail businesses, like newsagencies, are part o the social fabric of a country. We are places where stories are told and traditions are shared. A world of mass merchants would be a cold and heartless place motivated only by riving the share price. So the stories don’t put money in the bank – sometimes that does not matter.
Newsagents across the country have stories like this – moments where stories and feelings come ahead of transactions. Customers like the personal attention and we need to remember that. We need to resist becoming like the mass merchants for if we do, we’ll miss moments like I saw in m newsagency on Saturday.
Cory Doctorow writing at Forbes.com thinks so. Check out Lulu – they publish over 1,000 new titles each week.
In his post, The Demise of the Professional Photojournalist, at the Centre for Citizen Media Blog Dan Gillmor writes how mainstream media cannot keep up with the media creation and access tools we have today but that photojournalism itself is alive and well regardless. He cites the recent abuse-by-tazer and Michael Richards (Seinfeld) racist attacks from the stage as examples of what traditional media companies are up against.
Gillmor’s excellent article is required reading for newsagents prior to developing their next business plan.
Sales for these and similar titles are plummeting. Down more than 25% this year. People interested in looking for businesses, property and acreage to purchase look online. These titles and others similar lose money for us every month. The publishers must be losing money too – unless their advertisers do not know that sales are way down.
We are about to do the second cull in preparation for releasing space for our layout changes in the new year.
No one body approves magazine titles having access to the low cost newsagent distribution network. We let all and sundry access our key asset without cost. It’s nuts!
In the two weeks to the close of business tonight, unit sales of Christmas cards and wrap in our shop are up 26% compared to 2005. Other categories are tracking growth less than half that. By going big and bold with cards is paying off. We are having exceptional success with Hallmark boxed cards.