Author: Mark Fletcher

Yahoo7 has launched. The new sites provides stronger competition for ninemsn. My only complaint is that Yahoo7, like ninemsn, does not drive traffic to newsagents – their bricks and mortar partner.

Newsagents didn’t receive their electronic invoices for Gordon and Gotch supplied magazines on time for today and this meant their computer systems didn’t receive advice of a price rise for New idea. While the loss of revenue won’t be that much, it’s frustrating that poor lines of communication by the distributor (Gotch) let them down.

A good article in the New York Times about Gen Y and how to reach them. Here’s the heart of the problem as covered in the article:

In addition to thumbing his nose at notions of “prime time” by downloading his favorite shows (without commercials), Mr. Hanson almost never buys newspapers or magazines, getting nearly all of his information from the Internet, or from his network of electronic contacts.

“Papers are so clunky and big,” he says. If those words are alarming to old media, they are only the beginning of a larger puzzle for today’s marketers: how to make digital technology their ally as they try to understand and reach an emerging generation.

I could also say that retail stores are old and clunky to this generation. We’re out of date. While the baby boomers may enjoy physical world shopping, Gen Y browse online through formal and informal markets. If retailers want to have a future they need to move their businesses online. We’re experimenting with part of our retail newsagency businesses online. We now transact more online in a month in the selected category than we did through the retail store over the previous two years. What’s odd is that only very few sales are to what I would call traditional newsagency customers.

Newsagents need to re-think their businesses and re-invent their offering so they connect with Gen Y as they become a more valuable piece of the economy.

Newspaper publishers are responding to the challenges of online competitors and mobile demands of consumers by purchasing competitors and even non competitors playing in the space. Each time this happens it increases the barrier to entry for others. While the publishers are doing this, they, in Australia at least, are forcing their retail and distribution partners, newsagents, to further increase retail outlets – even if they compete directly with newsagent outlets. This to me seems like double standards.

On the one hand publishers want more control over their own business while at the same time diluting the control newsagents have over theirs. Newsagents, unable to effectively collectively bargain, have little ability to resist the demands of newspaper publishers as to where newspapers are sold.

This channel of specialist news and information retailers become less relevant with every new outlet newspapers are put into. In years to come this will be a case study in business schools and the behavior of some newspaper publishers will be under scrutiny.

This issue is on my mind today as newsagents are being told to supply Gloria Jeans coffee outlets. No discussion, just a requirement. No matter whether you have another outlet selling newspapers next door or even if your newsagency is next door. There may be some exceptions but I have not heard of any yet.

I can see the logic of newspapers in Gloria Jeans outlets. However, how many business do you know of where the owver is forced by a supplier to compete with themselves, to dilute their point of difference?

Following this post I have spent more time looking into magazine product available at eBay Australia. I am surprised at the number of current issue and immediate past issue magazines for sale. The current issue product has to be of questionable sourcing (stolen?) because I cannot fathom how else it could be so heavily discounted.

The immediately past issue stock must be concerning for magazine publishers (it’s concerning to me) because this would impact sales – especially in, say, the craft or any other area where having the latest issue is not always important. Looking at the titles available, I’d suspect that people buy a current issue, copy what they want (for a craft or cooking magazine) and then sell the original on eBay and get back, say, 60% to 80% of their purchase price.

From what I can see, enough of this stock moves for people to keep loading eBay with magazine product. But then maybe there is no accounting for what people buy. (Maybe I could sell past draw date lottery tickets and attach a note as to the dream I had for the winnings if I had won. eBay sells wackier stuff than that!)
I guess there is no law against it. However, the structure of the eBay marketplace and the speed with which recent stock gets on eBay suggests that some rules may be being bent.

My retail business relies on magazines for around 30% of its revenue. That eBay is so strongly in this space and I didn’t know it is embarrassing to me.

I’d like to see some media attention to what’s selling on eBay and it’s impact on legitimate businesses like mine.