Author: Mark Fletcher

Rupert Murdoch’s News Corp. seems to be building a Craigslist classfied advertising clone across at MySpace. It will be interesting to see if this comes to Australia and if so how it interacts with News’ newspapers.

Every day in every newsagency across Australia customers talk with employees about things they do not tell their own families. Just in the last week in my shop we’ve heard from the wife struggling with her husband’s Alzheimer’s; the girlfriend who has fallen out of love with her long term partner; the lady who had been looking forward her friend’s 100th birthday party; the mother with a son in jail for drug offences and upset at the Van Nuygen case; someone asking for help with a personal ad.

We cherish these stories and the humanity they bring to our counter and to the relationships with our customers.

I’ve decided to collect these stories into a live journal for no real reason other than as a keepsake for ourselves. These stories are from our community and it’s important to me that we preserve them as a reminder of our day to day personal journey with our community.

We have an exercise book behind the counter into which our front line team is encouraged to write the stories shared with them and to read others.

While my shop is a place of commerce, it’s also part of each of our lives. Hopefully our journal will remind us of the privilege of the personal contact we enjoy each day with our customers.

This personal contact is what sets small business apart from its competitors. We know our customers.

Around 60% of all lottery sales in newsagencies are lottery products an nothing else. This is in part dies to rules by the lottery companies and rules by other key suppliers, newspaper publishers and magazine distributors, as to where and how their products are displayed.

Given the high foot traffic to the lottery counter it seems to me that a win win is waiting to be created. Maybe units which efficiently display feature products at the lottery counter to drive the add on sale. In return for lottery promotion elsewhere in store.

Lottery sales are great. They would be greater if they included a newspaper, a magazine or some confectionery. I’m working with one publisher on a trial. Newsagents, nationally, need a strategy.

Adult, Computer and Buying and Selling magazines are in trouble if the data I have been looking at from several newsagencies is reflective of what is happening nationally. I have compared magazine growth for the newsagencies with the national average and most are close. I have also compared year on year performance for six key popular titles with national data for these titles and they, again, are close. So, I know the data from my sample is good and it is reasonable to consider that other magazine data from this small group might reasonably reflect a national trend.

Based on the stores I have looked at I have grave concerns for the future of the Adult, Computer and Buying and Selling categories. In these stores, between September to November, comparing 2005 with 2004, unit sales were down by more than 30%. In the same stores women’s weeklies, women’s interests, house and garden, fashion and food and all solid growth categories.

When you think about it, falling sales for Adult, Computer and Buying and Selling categories ought to be expected. Here’s why:

Adult. If you want porn it’s easier and faster to get it on the Internet. Magazine porn is so yesterday.

Computer. Computer geeks through to novices all know that the latest information is on the Internet. There are new computer ‘magazines’ which only publish on the Internet. Duh!

Buying and Selling. Print lead times mean that ads in the trader type newspapers and magazines are out of date by the time they hit the shelves. If you want a car look online – the ad looks better and you have more useful search tools.

Magazine publishers and distributors and newsagents need to work together, urgently I suspect, to finesse space allocations and adjacencies to respond to the falling and growing categories. Sure it’s bad news but it’s also an opportunity. It is important that newsagents are not the last to find out about the sales fall. They cannot afford to carry the categories as they fade into oblivion. In my own store even though sales in the three categories are down, scale out has not been altered so my stock investment is generating less of a return today.

It would be easy to see if the data from my sample is accurate. Once it’s confirmed a clear strategy needs to be developed and implement.

My feeling at the moment is that I want to remove Adult altogether as the return is not there for the stock investment. I’d keep Picture and People and lose all the bagged magazines – Playboy, Penthouse etc. This over the counter market is gone. I’d shrink the computer section by 50%, relocate it and re launch the category. I’d cut buying and selling by 50% – specifically I’d eliminate the magazines with a long shelf life and out of date content.

With the reclaimed space I would reinvigorate Food, Fashion, Women’s Weeklies and Crafts – all strong categories in my store.

The Internet is affecting magazine sales and what we’re seeing with Adult, Computers and Buying and Selling is the beginning of very significant change.

I had a customer in my newsagency yesterday wanting to pay their Optus bill. It was $4.99 (yes, four dollars and ninety nine cents). At Australia Post, opposite my shop they wanted to charge a 50 cent handling fee. 10% for pushing some buttons on the computer. 10% after making the customer wait in line for almost ten minutes. The customer came to my shop, paid the account and was out in just over a minute. No 10% surcharge. No long line. Plenty more smiles.

This surcharge by Australia Post on Optus bills is appalling as is the long customer wait times. If I were Optus I’d cancel the contract altogether as the surcharge reflects on them as much as Australia Post.

The government has no business owning and operating the Australia Post retail network.

The ACCC called for responses to its paper about Principles for the public disclosure of record keeping
rule information provided by Australia Post. A Regulatory Accounting Framework (RAF) was issued in March 2005, following legislative amendments giving the ACCC the power to issue record keeping rules to Australia Post. Under the RAF, Australia Post is required to provide annual financial reports to the ACCC for 16 defined ‘service groups’.

The RAF is important because it creates a framework through which Australia Post is more open about its divers operation and how revenue and costs are accounted for and, hopefully, any cross reliances and cross subsidies.

The ACCC has received four submissions. One from Australia Post, one from an association representing post outlets and two from newsagent associations. [Declaration: the ANF submission includes material I prepared for the organisation last year which I was a Director and the United Newsagents of Australia submission was prepared by me.]

My concern relates to the cost of attracting business and achieving each sale in a government owned PostShop compared to any other retailer. I suspect that the Australia Post brand and its exclusive mail related services draw customers into their retail outlets for a significantly lower cost and would like appropriate data to enable analysis of this. I the data reveals a problem then it could support a complaint with the AGCNCO.

It is important that the public is able to determine for itself whether Australia Post is adhering to its obligations of the Act and in particular Sections 14 through 16 relating to the permitted functions. It is my contention that Australia Post is operating significantly outside what is allowed for under the Act.

I see Australia Post leveraging the brand recognition and respect earned through its reserved services into lucrative business for its non reserved services and that this provides an unfair advantage.

I am godsmacked that News Ltd’s decision in South Australia to ignore newsagents for their Star Wars DVD giveaway this weekend. For over one hundred years newsagents have been the retailer of choice for publishers. While an occasionally fractious relationship, the support by newsagents for newspapers and vice versa has been extraordinary and a key reason, in my view, why newspaper sales have remained relatively strong in Australia while they have fallen elsewhere around the world.

The people at the Adelaide Advertiser have made a decision to ignore newsagents this weekend with their Star Wars DVD give away. The over the counter promotion is being run exclusively through BP retail outlets. The promotion will be supported in the press and on radio.

This promotion sends the wrong message to consumers if you want a strong newsagency channel. It undermines newsagents as the destination point for newspapers and boosts BP instead. It undermines independently owned small businesses and boosts a multi national brand. It dilutes the relevance of newsagents to other suppliers – magazine publishers and distributors and other newspaper publishers will note the News action and possibly follow.

Newsagents have helped Rupert Murdoch achieve an incredible worldwide footprint. It is disappointing to see News forget those who helped make the company great.

According to CNet’s news.com: “Microsoft is developing a free online service that will let people list items for sale, events and other classifieds-type of information that can be shared either with groups of friends or anyone over the Internet, the company said Tuesday.”

While this new offering from Microsoft seems to be quite different to the recently launched Google Base, that it is playing in the same space of classifieds is significant but not that unexpected blow to print media. It’s integration with MSN in particular takes the idea of classifieds to a new place and makes them more appealing to the IM generation.