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newsagency of the future

Interesting newsagency model in Malaysia

mynews.jpgI was in Kuala Lumpur earlier this week in time to see the opening of the new myNEWS store at Bukit Bintang in downtown Kuala Lumpar.  This is a very interesting store, a nice evolution from the more traditional myNEWS model.  To us here in Australia it is like a 7-Eleven store with a much stronger traditional newsagency product mix and customer service focus.

The layout is terrific, inviting.  The shop looks as visually clean inside as it does outside.  Each area, magazines, confectionery, stationery and convenience lines, is well signposted.  The store has at least ten times the range of magazines you would see in a 7-Eleven store.

I got to see several of these myNEWS stores this visit and you can see the evolution represented in this latest store.  It leverages the convenience model without detracting from being a destination for key categories.

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Newsagency management

When you think of 7-Eleven do you think of quality barista made coffee?

No, neither did I.  7-Eleven coffee was absolutely last resort coffee, desperation coffee.  That was until two nights ago.

I was in Sydney and saw a new format 7-Eleven coffee shop on George Street.  I’d not seen a 7-Eleven like this before.

The front third of the shop looks different to the rest, darker, cooler, like a coffee shop.  The back bit was the usual 7-Eleven garish and bright.

But enough about the look.  At this massive coffee machine, a real machine and not some glorified cafe bar type machine, making fair dinkum live coffees was a barista.  Someone showing passion for making good coffees.  This is not what I had come to expect from 7-Eleven, the masters of prepackaged everything … the place of nothing really fresh, nothing made for you.

Until now.

At this 7-Eleven on George Street in Sydney you can get a coffee which looks, smells and tastes like a fresh espresso from any of the many coffee outlets in Sydney’s CBD.

While newsagents bitch and moan about what is said or not said about their future, 7-Eleven is experimenting and innovating.  Kudos to 7-Eleven.  This is the future, playing with the model, trying new things, showing customers that your business is not what you thought it was.

Welcome to retail in a disrupted and challenged world.  The innovators will thrive and the best the rest can hope for is to survive.

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Newsagency challenges

Good media coverage for newsagents

Following the story in yesterday’s Australian Financial Review, I was interviewed by Adam Spencer on ABC 702 in Sydney at 6:40am and on 2UE by Michael Smith at 1:20pm.  Both interviews picked up on the opportunities of change for newsagents and connected with the vital importance of newsagencies in local communities.  They talked up the retail channel – as did the article if you read the whole piece.

I loved being able to get the message out that newsagents beat Harvey Norman, Big W, Australia Post and Dick Smith on price!

I received calls from several newsagents late yesterday who had heard one or the other of the interviews.  But they rang more in response to some of the comments to yesterday’s blog post.

Publicity for the newsagency channel like we saw yesterday is good.  It pitches our businesses as important and relevant to the community and moving with the times.  This is vital if we are to be seen by shoppers as relevant.  The last thing we need is to be though of as out of date retailers as retailers seen that way are soon forgotten.

Rob Hunt from nextra called several newsagencies that I know of yesterday, talking down the AFR story, trying to scare people.  From what I have heard, Rob offered nothing positive, no pathway to a brighter future, no suggestions on how to deal with changes we already see.  He seemed only concerned about being negative.

The debate between newsagents about what to discuss publicly and what to keep to ourselves about our future as a channel is not a useful debate.  It will not help us navigate to a future.  Our future is in the public domain in a range of ways including audit and other publicly released data.

We need to be publicly realistic about what is happening.  But more important than that, we need to be publicly opportunistic.

There are not enough people and organisations serving newsagents who are prepared to pursue a bright future beyond what we know today.  Too many prefer to oppose for the sake of opposition.  Or they oppose to try and take focus on the smart move by a competitor.  These NoNos, the people who complain and criticise without working on a plan for the future, are wasting the attention of good newsagents.  They ought to create a plan themselves and show that they can do more than just complain and criticise.

It is natural that Rob Hunt of nextra would complain about the AFR article given that a key feature was the growth in sales reported for newsXpress stores and the coverage of the national TV campaign announced by the group.

A better response from Rob Hunt would have been an announcement about a TV or some other equally valuable and national campaign for nextra newsagents.

Our channel will be well served by multiple positive, strong and future focused newsagency marketing groups.  This would play a valuable role in strengthening the newsagency offer.

I also heard late yesterday that a bank representative pointed to the article to justify their lending approach on newsagencies.  Hmm, yes, it makes sense that a bank used an article in July 2011 to justify a policy change from early 2010 (or before). Not!  Banks take into account many factors when considering lending proposals.  The P&L of a business is paramount.  The future opportunity of the channel in which the business is also a factor.  This is where the AFR article had plenty of good news.

Finally, I’d note that the price people buying a newsagency for is a factor of the P&L and the perceived opportunity.  This is why we must, every day, drive P&L value and pursue opportunities in our businesses.  Energy invested in these areas will increase the value we achieve when we sell.

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newsagency of the future

Newsagency of the Future (Part 2)

I am planning a series of Newsagency of the Future workshops for next month, picking from where the series I ran last year left off.

I think it is time for us to go beyond what might happen and consider specific plans for what the future of individual newsagencies and the channel more widely will look like.

There is good data to inform decisions by those who want to ride the crest of the wave of change.

I don’t claim to have the answers, but I do know how we can navigate, individually and collectively (in small or medium sized groups) valuable and defining moves for our businesses.

As I plan for the workshops and sift through topics to consider, I’d ask newsagents these questions:

  1. Are you concerned abut the future of your business?
  2. With everything you sell being available at a range of other businesses, why will your shoppers continue to shop with you?
  3. How do you know this to be true?
  4. With the sale of print products challenged, what new areas do you see for your business?
  5. If you were all powerful what would you change about your business?
  6. What are you good at?

Feel free to email me direct at: mark@towersystems.com.au.

I hope to have dates and venues sorted out by mid next week.  I am looking for this workshop series to provide a platform for conversation between newsagents about the business model and how this can be adjusted to make the most of the marketplace in which we find ourselves today.

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newsagency of the future

Free One Day Newsagent Conference Series

Newsagency marketing group newsXpress is hosting a series of one day business-building newsagent conferences starting this Tuesday in Brisbane.  Attendance is free for newsagents considering joining a newsagency marketing group.

Here are some of the topics being covered along with great deals from suppliers at an accompanying trade show:

  • No Excuses, Why Some Newsagents Will Fail and Others Succeed
  • Using Social Media to Grow Your Business, Facebook, Twitter, Email Local Area Marketing
  • Engaging in Telco / Store in Store Opportunities
  • Strategic Greeting Card Review and Opportunities
  • In the Lab, Experimenting for Newsagencies
  • Everyday Merchandising of your Newsagency

The dates and locations are as follows:

  • Brisbane Tuesday 17h May 2011– Brisbane Technology Park, Cnr Logan & Miles Plating Rds Eight Mile Plains, QLD, 4113
  • Melbourne Thursday 19th May 2011 – Hemisphere Conference Centre, 488 South Rd Moorabbin VIC 3189
  • Sydney Thursday 26th May 2011 – Bonnie Doon Golf Club, Banks Ave, Pagewood, NSW, 2035
  • Perth Tuesday 31st May 2011 – Crowne Plaza Hotel, 54 Terrace Rd Perth WA.

Speak with newsXpress General Manager Ben Kay on 0419 678 754 to arrange to attend for free.

Disclosure: I am a Director of newsXpress

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newsagency marketing

A reflection on killing print

A guy called Ed Dale has published a reflective blog post about, among other things, Australian newsagencies, print, the demise of Borders bookstores.  he talks lovingly about a newsagency in Beechworth (now newsXpress Beechworth).  I encourage newsagents to read this as it speaks to the role we have played and often play in people’s lives today.

The Australian newsagency is important to the fabric of our country.  This is more obvious in rural and regional situations.  It is also true in suburban situations. We do not embrace and promote this importance as we should.  I tried to connect with this when I wrote the newsagent TV commercial in 2008.

There are plenty of stories like Ed’s yet we do not collect and uphold these.  We should.

Thanks to Paul Wallbank for pointing me to this blog post.

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newsagency of the future

Why a newsagency can be a good business to purchase

Every week I hear from one or two people looking at buying a newsagency asking about the process or whether I think newsagencies are good businesses to own.

A it happens I do think that newsagencies are good businesses to own.  Sure, print products are challenges.  However, they are not dying any time soon.  Indeed, traffic from newspapers and magazines is excellent … good enough to build strong sales of other products. Lottery products generate excellent traffic.  Greeting cards generate excellent traffic.  Business services like photocopying generate excellent traffic.

So, my first reason for saying that newsagencies are good businesses to purchase is the traffic opportunity.  Smart newsagents can achieve good things with this traffic.  they can lead the business through change which attracts new customers and gets existing customer spending more.

The challenges we face as a channel and , more importantly, individually, present opportunities for us to play considerably outside our traditional model.  There is where good retailers wille xcell.  not so much good newsagents of the old school variety, but good retailers.

This is my second reason for saying that newsagencies are good businesses to purchase … the opportunity to profit from change.  Take an old school newsagency and turn it into something fresh and bright.  Use the core traffic and get out of what is not making money.  I have seen newsagencies take on cafe, book, printing, gift, homewares and even haberdashery products.  The changes of today and tomorrow present excellent opportunities.

many newsagents are tired, some are lost, some are not retailers. Replacing these folk with fresh retail-focused ideas can refresh a business and help it turn a profit.

This is my third reason for saying that newsagencies are good businesses to purchase … to bring in new blood and turn a tired business around.

Almost every newsagency in Australia is connected to the community in some way or another.  Through supporting sports groups, participating in community groups and helping other local charities, the local newsagency is the quintessential local business. In some locations, the newsagency defines the local character.  In others, it is the local meeting place.Even in capital cities, newsagencies are the places people go when big retailers let them down.

This is my fourth reason for saying that newsagencies are good businesses to purchase … to better leverage the community connection.

While there are plenty of reasons for buying a newsagency, these are four I would highlight.  I think that the channel has a bright future if we embrace change and attract more buyers with good retail skills.

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buying a newsagency

Why did Borders and Angus and Robertson fall into administration?

Journalists reporting the appointment yesterday of administrations to RED Group, the parent company of Borders, Angus and Robertson, Whitcoulls and Calendar Club, have been pointing to online sales as the cause.

I think that they have been too quick to feed off the line put about by publishers and others in the book space.

While I am no expert on the finances of RED Group, I suspect that the appointment of administrators came about because of debt levels, flat retail, the challenges of online book sales and, importantly, the impact of migration of print to digital.

The other factor is the challenges for the Borders brand.  The UK group closed in 2009.  The US group last year released the Kobo reader, three years after Amazon entered the space.  From 2007 until last year, Borders was not attracting revenue from the rapidly growing digital books business.  This is business which has been growing exponentially for the last three years.  In fact, growth in sales of digital books has taken off just the same way growth in the sale of digital music did around six years ago.

While I am no expert on the Borders business, I would speculate that the migration of sales from print to digital has been a bigger factor in the appointment of administrators to RED Group here in Australia and the filing of chapter 11 bankruptcy in the US of Borders over there.

The RED Group story is a story Australian newsagents ought to watch and study as it unfolds.  I am certain that in the analysis we will find insights which are useful to us as we contemplate what the newsagency of the future may look like.  I say contemplate as if newsagents are doing this.  Unfortunately, too many are not.

Newsagent continue to build shop fits which are suited to ten and more years ago, shop fits which are not flexible and with large fixed magazine departments. There are too many shop fits with fixed location and too big newspaper displays.  Too many newsagents operate loss making newspaper home delivery businesses.  Too many newsagents act as warehouses for stationery rather than buying on a just in time and more commercially viable basis.  In short, too many newsagents are not adapting to changed conditions.

Maybe RED Group in Australia and Borders will trade out of their situation.  That is, after all, the goal of chapter 11 in the US and administration here in Australia.

In the meantime, I hope that the news of yesterday is a wake up call to newsagents to look carefully at their business plans.  If they take the bait and believe that the problems are due to online sales of books they they will not do this.  If they accept that the problems for Borders and Angus and Robertson are, in part at least, caused by a migration from print to digital then they they will consider their future and revise their business plans as a result.

The potential for negative impact of print disruption on our channel is considerable.  Not planning could be a fatal business mistake.  Planning for it could uncover the best business opportunities for newsagents in decades. I think that the opportunities for our channel, or some in the channel at least, are excellent.

Footnote: From what I can tell looking at the ASIC website, the Supanews group is not currently affected by the RED Group issues.  However, media reports suggest otherwise.

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Media disruption

Newsagent loses newspaper subscription to iPad

A Victorian newsagent has had a customer cancel their Herald Sun home delivery citing that they now get the newspaper delivered on their iPad.

This is the first report I have heard of this happening.

Such an occurrence should not be a surprise.  It has been inevitable since the Herald Sun iPad app was released. The question for each newsagent is what you doing in your businesses to respond to the disruption of new distribution channels for content which was formerly only distributed via print?

I firmly believe that these are days of opportunity, when we can redefine what we stand for and set for ourselves an adjusted direction.

The challenge is dealing with some suppliers who need us to be the newsagents of old for another three years or so.

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Media disruption

Newsagent story on ABC TV today

The interview I recorded with the ABC on Thursday will run as part of the Midday report on ABC1 at 12 noon today – it was held over on Friday due to the story from Egypt.  We covered considerable ground in the interview which I hope hakes it to air.  I express concern about the number of newsagencies closing, the inequity in the magazine distribution model which sees us disadvantaged over other ,magazine retailers and the success entrepreneurial newsagents are having in embracing change.

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magazines

Cup cakes?

cupcake.jpgI was talking with someone looking to buy a newsagency this afternoon and they asked if I knew of anyone selling cup cakes in their newsagency?  I said I would ask here.  I am aware of cup cake shops next to or near several capital city newsagencies but not inside the store.

I like the idea of cup cakes in a newsagency as they are one of the essential foods for survival.

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newsagency of the future

UK supermarket brings beauty salon to supermarkets

Giant UK supermarket group Tesco is launching a chain of beauty salons, with reports suggesting up to 70 salons by next year.

This is interesting on a couple of levels: the competition from a major retailer to a previously independent service offer and the extent to which a business like Tesco can and will evolve from its traditional model in order to achieve growth.

The second point is the more interesting from a newsagent perspective since we need to be discovering new revenue and traffic generating opportunities for our businesses.

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Newsagency challenges

Fairfax shifting from print

Margaret Simons wrote an excellent piece yesterday for Crikey about Fairfax plans for a digital rather than print future.  This paragraph will make newsagents sit up and take notice:

I gather that Fairfax Media is contemplating a fundamental shift away from a future based on print, and towards the migration of readers to online and in particular mobile devices — the iPad and its competitors.

Fairfax needs to do this, more do that News given the difference in customers of both organisations for their dailies.

I urge newsagents to read all of Margaret’s article and to consider this in the context of the newsagency of today, tomorrow and the future.

Consider the Australian Financial Review.  If I was working for Fairfax I’d be crunching numbers about a digital only model with a subscription offer which includes a free tablet computer for a two year commitment.  I have no doubt they could beat the 80,000 or so current daily sales for a much lower distribution cost.

This is not bad news, or speculation if that’s how you see the discussion of disruption to print.  No, the changes are an opportunity for newsagents to reinvent themselves, to move on from the constraints of being an agent and to unshackle ourselves from the news. Many smart newsagents are doing this already and are having a ball.

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newsagency of the future

How could media disruption affect newsagents?

print-media.jpgAt my recent Newsagency of the Future workshop series I presented to more than 400 newsagents my thoughts on the current state of play of the newsagency model and shared how we might navigate to a future. Part of the workshop was a presentation on print media disruption. I edited that section down to focus on one key aspect of disruption (there are several) and yesterday recorded a video for anyone wanting to find out more about this. Click here to see the video. While it is lacking in production values it is designed to get newsagents thinking about their model in the context of medium term and long term business planning.

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Media disruption

The 2020 newsagency

Based on the emails and calls I have received over the last couple of days, I have struck a nerve in asking here what an Australian newsagency will look like in 2020.  Newsagents are keen to discuss this.  I am keen to discuss it.  Some newsagency suppliers too.

For the record, I feel bullish about the future.  I see excellent opportunities.  These spring from what will happen with some of our core products and the realisation by more newsagents that our future is up to us.

Some newsagents are already having fun exploring new product and service opportunities and building businesses with healthier margins than the traditional newsagency.  This is a minority group though.

For many newsagents there is a time of unlearning to go through.  This includes an assessment of each department of the business and assessing its contribution to profitability in the context of return on investment, return on floor space and return per labour unit.

Newsagents who do this work soon see opportunities and embrace the liberation which often follows.

Profit is the key to decisions about the future – short, medium and long term.  For many, this is a new paradigm for newsagents.

Profit based decisions are where some traditional newsagency suppliers will struggle.  They will soon realise, though, that to engage with new generation newsagents the profit model of the past will not cut it.

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newsagency of the future

Two rainbows over Sydney Harbour

rainbows.JPGAs I have written here recently, I am researching, considering and wondering about the newsagency of the future … five and ten years hence.

While some say you cannot plan that far ahead, my view is that we have to look out as far as possible and consider what our future could look like. Sure we may get it wrong.  I would rather get it wrong trying that not trying at all.

Considering our future is even more important for newsagents because of the change in supplier engagement in recent years compared to the first 130 years of our existence.

All of this was on my mind as I sat at the desk in my hotel room in Sydney tonight working through sales benchmark data, looking for trends.  I looked up and out the window and saw two beautiful rainbows dropping down over Sydney harbour.  One landed on the forecourt of the Opera House.

Without wanting to sound too ‘weird’ the glorious sight reminded me that we have to get out and look for gold at the end of our rainbows.  Today, our rainbows are excellent traffic, ideal geographic location and being top of mind in key categories – cards, magazines, newspapers and lotteries.  We will be blessed with good traffic for some time to come.  In the future, our rainbows could be new product areas, new services or a completely new style of retail.  As I said, we have to get out there and looking, no matter how far into the future it may take us.

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newsagency of the future

The 2020 newsagency

Several newsagency suppliers are actively researching what our channel will look like in five and ten years time.  They have engaged professional researchers to look outside and inside the channel for information to guide their view.

It concerns me that newsagents appear to be unconcerned about the same question.

Maybe 2020 is too far away to consider.  Maybe they are swamped in the day to day to worry about the future.

Given that an average shop fit investment lasts five years we need to consider this.  Good news or bad, being more aware of what might be will better inform the shorter term decisions we need to make in our businesses.

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Newsagency challenges

Planning for 2020, the newsagency of the future

I was talking a major landlord recently about the future of newsagencies and was asked what our channel would look like in 2020.  I gave a vague answer and moved on to more near term issues around occupancy cost, marketing fund contributions and tenancy mix. Their question has been on my mind ever since.

What will our channel look like in 2020?

To find a possible answer to this billion dollar question I have been looking at the benchmark data I have been gathering for years as well as other trend data for key product categories we carry.

While the view I ultimately form in answer to this question may ultimately be wrong, it is important to at least consider.  Every newsagent preparing a business plan must have a similar question on their mind and if not, why not?

We have spent far too long worrying about what our suppliers will do for our future.  No more.  2020 is up to us and I have to say that the more I work on what my model will look like by then the more questions I have.

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Newsagency benchmark

Newsagents are upbeat despite tough conditions

Last week I completed the twenty city tour for the Newsagency of the Future workshop s. Today I am in Perth finishing the latest round of newsXpress member meetings. What has struck me, thinking back on the hundreds of newsagents I have spoken with over the last six weeks, is the positive attitude of so many to the future.

While many, across all marketing banners, share concern at tough retail conditions, the conversation turns to the future and steps they are taking or could take to make for themselves a stronger future. This reflects a well-known resilience among newsagents to challenges encountered along the way.

The newsagents I like talking with the most are those who pursue opportunities across a range of categories in their business. This cross-category balance is vitally important to our health.

We have an opportunity today thanks to still good traffic with newspapers, magazines, lotteries and greeting cards. We can use this traffic to build sales in other product categories. Sure there are frustrations with some products in these categories.

So, here is a question for every newsagent: what are you doing today to leverage good traffic for newspapers, magazines and lotteries?

You have to be doing something to try and drive more business from sales in these three key categories.

I have spoken with some newsagents in recent weeks who are energetically driving sales and banking excellent results. They are making lemonade as Forrest Gump would say.

I am coming out of this latest cycle of travelling around the country talking and working with newsagents more upbeat about our future than when I started.

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Newsagency challenges

Three Newsagency of the Future workshops next week

The Newsagency of the Future workshops are starting to wind down.  I have three more this week and one to schedule in Townsville.  The content has evolved as more information has come and as conversations at the workshops have evolved.

Getting to engage with more than 300 newsagents about the future has been a privilege.  Hopefully, the conversations started lead to good outcomes for the newsagents involved and the channel more widely.

Here are the details for this week:

  • Geelong.  Tuesday 11am.  Mecure Hotel.
  • Gold Coast.  Thursday 10am.  Marriott Surfers Paradise.
  • Melbourne.  Friday 11am.  Geebung Polo Club Hawthorn.

Click here to book online.

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newsagency of the future

Second Newsagency of the Future workshop in Melbourne

I am running a second Newsagency of the Future workshop in Melbourne next Friday, July 9 at the Geebung Polo Club, 85 Auburn Road, Hawthorn East – at 11am. The session is open to newsagents as well as newsagent suppliers and its free.

Come along for a robust discussion about the future of the channel.  I’ll also be sharing insights from speaking with more than 300 newsagents over the last two weeks at these sessions.

Click here to book a place.

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newsagency of the future

Newsagency of the Future in the news

Sally Jackson of The Australian interviewed me last week about the Newsagency of the Future workshops I am running at the moment.  Sally’s article is in today’s newspaper and can be found online here.

I hope that the article encourages more newsagents and specialist newsagent suppliers to think about and work toward the future.  While we have seen dramatic change coming for years, the iPad appears to have delivered the moment when newsagents get that print will not be the core traffic generator forever.

As the discussion following my Visual Merchandising post on the weekend shows, we are our own worst enemy when it comes to modern day retail practices.

This ,the Newsagency of the Future workshops will be held in Sydney, Canberra and Hobart.  Next week we hit Brisbane and Cairns.  For a list of dates and bookings, please click here.  We will be adding another date for Melbourne and shouuld have this listed by the end of this week.

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newsagency of the future
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