Author: Mark Fletcher

While the Federal Communications Minister, Senator Coonan, is busy promoting the government’s proposed media ownership changes, Australia Post, another of her responsibilities, continues to stray further from the functions allowed for under the Act. Their April catalogue (click on the picture below) offers a teddy bear, laser printers, home office stationery, pens and plenty of other items small business newsagents and small business photo shops sell. There is little in the way of postal related product.

Government owned Australia Post retail outlets are hurting small business with catalogues like this and it is an indictment against the government that it allows its corporation to operate unchecked in this way.

Another newsagent told me today that they had walked away from the home delivery of newspapers saying that their 400 deliveries were not viable for the business because of the low delivery fees set by publishers.

Chinese, Malaysian, Singaporean, Vietnamese and Indians are buying more newsagencies yet suppliers, industry associations and newsagents fail to adequately embrace them. This failure leads to a disconnect with the channel, its best practices, traditions, and the community it serves. I estimate that more than 20% of newsagents are of a non-English speaking background yet my software company, Tower Systems, is the only industry supplier to actively embrace them and provide non-English services. (We provide Cantonese, Mandarin and Vietnamese speaking support and services.)

If industry associations, suppliers and newsagents believe that the channel is unique then they must actively embrace non-English speaking newsagents and bring them closer to the fold. This means offering access to services in languages other than English, employing staff to serve this need and spreading the passion of the traditional newsagency.

Failure to act fails not only the newsagents but also the communities they serve.

Easter is approaching fast and newsagents are embracing the season like any good retailer. It’s our connection with big seasons which bring people back in who may not have visited for a while and this is an opportunity to remind people about our magazine range and other points of difference. Take a look at one of our window displays:

I’ve been chronicling here the success we have been having in my newsagency with the magazine club card which I developed and implemented a year and a half ago. This was the newsagency channel’s first magazine based loyalty program. It’s been a huge success and I’m aware of close to 100 newsagencies running the promotion. The newsXpress group, of which I am a Director, adopted the program in October 2005 and launched it a month later. I just found out that the Newspower marketing group is about to launch it’s own magazine loyalty program. While I wish newsagents well with the Newspower program, I would have liked to see them offer a point of difference in the loyalty stakes. The more the newsagency marketing groups copy each other the more diluted the offering becomes. If the Newspower offering is similar to what I created I’ll start looking for new playing fields.

The doubts I expressed here about Alpha here months ago have proven to be unfounded. Sales are strong despite a requirement that it is only sold with the local News Ltd tabloid. Key to the success of Alpha is its placement next to newspapers and the $2.00 cover price. Even convenience stores are compliant with placement. Fairfax could learn from this strategy with Smart Investor. Placing Smart Investor next to the Australian Financial Review, The Age or the Sydney Morning Herald in addition to the newspaper display will boost sales. The challenge is to provide display units which create such space next to these newspapers. I’d also contemplate a lower cover price to make the purchase of two titles more enticing – even though this could be frustrating for newsagent employees at the counter.

The data I am seeing suggests that Smart Investor has a sell through rate of 20%. This is unsustainable for newsagents.

Vodafone cut the commission newsagents earn from selling their recharge product by 37% a few months ago to 5% yet left Coles at 16%. Now they have a promotion with the Herald Sun and expect newsagent support in handing out this lanyard and guide to Melbourne for the Grand Prix.

I heard of a newsagent who conveniently lost the box of Vodafone material. We’ll hand the stuff out in my shops, but begrudgingly. Vodafone has treated newsagents appallingly while sucking up to Coles. Vodafone customers need to understand how this phone company treats small business versus big business.

Newsagents in Western Australia are apparently about to face competition from their lotteries supplier, Lottery West, thanks to their planned launch of an online and mobile service.

I’ve proposed merging my newspaper home delivery business with those of newsagents near mine along the lines of the business plan I posted here some months back. I’ve failed. The only newsagents interested in amalgamating territories in a shared equity model in Victoria are too far away from my territory. Disinterest among newsagents to drive change in newspaper distribution seems to be a national challenge for the industry.

I’m concerned that if newsagents don’t act to create a new distribution model in the next few months they will lose the opportunity and have significant business consolidation changes imposed on them.

Suppliers to Australian newsagents often complain at the difficult at achieving compliance, traction, engagement, cut through – call it what you will. As a newsagent (through my software company) and a newsagent I see both sides of such communication. In a typical week an average newsagent receives more than 120 communications requiring some form of considered response. I do not include advertising flyers, invoices or statements in this list. No, these communications are phone calls, emails, faxes and letters asking for data or some in store action in relation to a product. While most are a necessary part of business there is a certain overlap which causes newsagents to duplicate effort. Further, being small businesses, newsagencies rarely have the manpower necessary to allow for delegation.

Having considered a full week of communication I suggest that suppliers could boost their ‘cut through’ by making communication simpler, provide context for the action requested, don’t over explain and focus on the payoff for the newsagent as a result of compliance.

I’d also like suppliers to work together on streamlining such communication – delivering this through a single channel rather than today’s complex and duplicated approach. Doing this would reduce time involved and free newsagents up for compliance activity.

I’m speaking from personal experience here. We achieve rapid compliance across 1,100 newsagents with software updates by following the newsagent communication guidelines noted above.

Some newsagents will not take notice of action requests no matter how efficient or clear they are and these are being left behind by others.

Monopoly is the new scratch ticket game being promoted by Tattersalls. We’re embracing it with home made t-shirts and some clever over the counter promotion.

With lottery sale licences up for review gu government over the next two years it’s no wonder that the future of lotteries is a big discussion point among newsagents. Many fear that getting lottery products will be the next big push for Coles and Woolworths. If that happens newsagents will be less inclined to promote new games like Monopoly because they will have lost their point of difference.