newsagency of the future

The ANF and some others complain that my opinion gets more attention that it should for one newsagent. Over the last two weeks I have met with more newsagents than I suspect any ANF Director has all year. I have been crisscrossing Australia participating in the Spring User Meeting Tour being run by Tower Systems. While there still another six sessions to go, I have been reflecting this morning on the considerable differences in our channel state by state yet the common challenges at the core of our businesses.

It is only when you meet with newsagents, out close to where they are, that you can get to understand the challenges and therefore start to work on practical solutions. The ANF ought to run sessions like Tower is currently running. By the time we are done we will have meet with five or six times the number of newsagents who attended the ANF conference earlier this year.

Newsagents tell me they want the fundamental issues resolved. Issues such as the magazine supply model. This is why when I blog here I blog on a representative basis and not so much as an individual. It is why when I complain about an issue I would prefer to see a channel-wide solution and not just a fix for me. Some of our suppliers are very good at fixing the squeaky wheel and not the systemic problem.

The best way for the ANF to address its concerns about this blog and my opinions is to get in front of newsagents, to talk about the issues which matter and to take a stand. The magazine supply model is the best starting point. The difference in the value to our businesses of the top 200 titles is compared to the rest is extraordinary yet we and others who represent us have failed for years to address this imblance.

Once the series is done and the last flight completed I plan to write a brief state of the channel report, based on feedback from newsagents I have meet on the tour.

I took the photo at our meeting in Adelaide yesterday.  In South Australia, Tower Systems serves well over 100 newsagents.  Nationally, we serve over 1,500.

Scott Karp has written an excellent piece about what newspapers could learn from the General Motors decision to transform their business around producing a commercially viable electric car. The connection between the GM reinvention and newspapers is covered in this paragraph:

All the talk about “saving newspapers” is focused on finding new business models to keep doing what they’ve always done — which is like GM looking for a new business model to sell the kinds of cars they made in the 50s and 60s. What the newspaper industry, if it is to survive as such, must find is a radical new value proposition for news — something so audacious, so self-evidently valuable that, if they can find a way to deliver it, would lead to the rebirth of newspaper journalism.

The same could be said for newsagents. Our future is dependent on us finding new customers based on new products and services. It is based on us reinventing ourselves locally and nationally.  This is what our industry associations ought to be thinking about and demonstrating leadership on.  Developing, debating and creating The Newsagency of the Future is the most important mission newsagent associations could have.  Unfortunately, I don’t hear anything from them about this.

92 people voted in the poll about sub agents. 42 said NO, 32 said YES and 18 said as a RESTRICTED MEMBER.

Newsagents who feel strongly either way on this ought to put their thoughts to their associations as I know this is a topic being discussed at the moment. Associations cannot reflect the will of their members unless they are told what members want.

I ran the poll for two reasons:

1. Because I have heard of a push in one association to actively recruit sub agents.
2. Because in a strict sense my two directly owned newsagencies are sub agents. We do not deliver newspapers nor do we have direct newspaper accounts. This makes us, in the eyes of some old school newsagents, sub agents.

Newsagents need to debate these issues as they go to the heart of what a newsagency may look like in the future.

EconCeleb 2008 is a one day conference in Los Angeles today about celebrity content, how old and new media can monetise this and how content is distributed. It’s the kind of conference I’d love to attend because it would provide an excellent insight into trends which are sure to impact magazine sales in coming years.

newsXpress held a Market Fair in Melbourne yesterday for members. Close to thirty suppliers were there with new products on display and some excellent newsXpress specific deals. This is what marketing groups are about, adding value to member’s businesses through exclusive access and or exclusive pricing.

Such offers cannot be put at the general industry trade shows such as the GNS Market Fairs which we also look forward to attending.

The difference between newsagencies is increasing – partially because of marketing groups but more so because of entrepreneurial newsagents versus people who have bought themselves a wage. Things like the market fair yesterday highlight this difference. There was talk about basket depth, margin and new money – all related to how newsagents can break away from the old newsagent model and use the current traffic to drive better, more commercially valuable, outcomes.

Roy Greenslade makes sense in his blog post at The Guardian about the decision by the publisher of the Belfast Telegraph to take home delivery away from newsagents in response to a dramatic sales fall. Newsagents aren’t the cause of the problem. The publisher is responsible on a range of fronts.

It is great to see someone of Greenslade’s stature get behind the story and defend newsagents.

Are we really to believe that newsagents in Ireland’s northern six counties are solely, or even mainly, responsible for this dramatic decline in the fortunes of a paper that was selling more than 100,000 copies on weekdays five years ago?

Beyond this Irish issue, however, is Grenslkade’s veiw of UK newsagents. It is something Australian newsagents ought to read. Sure we take comfort from the fact that the UK market is different to ours. The reality is not that different that we can ignore what has happened to independent newsagents in the UK. Check out Greenslade’s opening paragraph:

Newsagents across Britain have been closing week by week for years, succumbing to a long-term trend that has seen the gradual disappearance of the economically unsustainable corner shop. Meanwhile, supermarkets have been supplanting them as the major retailers of newspapers.

Gulp. Did he really write that? Isn’t is heresy to put this view in front of newsagents. Don’t we want to believe that none of this will affect us? Yes, yes and yes.

Read the whole piece – you’ll understand why I bang on about the Newsagency of the Future and why I have been so interested in the demise of Kleins and other business models which have not been refreshed.

Roy Greenslade is someone I would have on a panel here in Australia to debate the future of our channel. His perspective on the future of our core products of newspapers and magazines could wake us from our slumber.

My original blog post on the Irish issue can be hound here.

Here is the final set of challenges I covered in my presentation of the Newsagency of the Future at the ANF conference yesterday.  These are not tough decisions for newsagents as such, they are challenges which suppliers need to address.  The difficult for newsagents is whether we have the will to engage with suppliers on these issues.

Magazines: Pay on scan based sales.  This will stop us paying for theft.  It will also make publishers and distributors more accountable for what they supply.  The current model has little such accountability and small business newsagents carry a higher burden.  I appreciate that paying newsagents only for scanned sales is a challenge.  Let’s at least open a conversation and see where it takes us.

Greeting cards: Agreed pocket based KPIs.  If a design fails an appropriate KPI and back end arrangements can make the publisher responsible.

Stationery: Buying 20%+ better than today.  Newsagents need better stationery buying arrangements.  If we cannot dramatically cut our buy price of stationery then we might as well get out of the game.

Newspapers: Reward based on success.  I’d like to see publishers treat retail newsagents as business people.  Reward us for growth and initiative which supports the masthead.

Home delivery: Open pricing of our services.  Newsagents provide the service, carry the risk and carry the cost rises.  It is a joke that they are not allowed to set their own fees.  As long as the current arrangements continue publishers cannot expect newsagents to act as business people. 

Retail: Put a price on our real-estate.  We give for free across 4,000+ newsagencies what others charge for.  We need to understand the value of this asset.

Vouchers: Transparent and competitive pricing.  Newsagents have been dudded in this category previously.  We need to make sur that deals negotiated on our behalf work for us and respect the breadth of our network.

My hour long presentation covered more than I have posted here in the last three posts.  These are the points I think we need to consider around the issue of the newsagency of the future – before we actually plan for what our future looks like.

The key for me in all this is that newsagents break free from their past for it is our clinging to territories and old world practices which is stopping us from making our own future.

This is the subject of presentations I am giving to the ANF Conference on the Gold Coast this morning. The problem with the title is that no one can know what the newsagency of the future will look like. I have no crystal ball. The future for newsagents is a moving feast for many reasons. My hope from the two presentations is to open a conversation among newsagents about the future – not out of fear but out of opportunity. I’ll blog some key points after the presentation.

The April 28 issue of Business Week lists the 25 Most Innovative Companies as compiled by the Boston Consulting Group. It’s a fascinating read. What stands ot from reading the article is the commercial value of investment in the business.

• Apple has rocketed to #3 in the smartphone marketn because of innovation which came our of investment in the business.
• Google is, well, Google, the leader in online search. Lasst year they increased R&D spending by 72%.
• Wal-Mart is turning itself around by investing in sustainability.

Check out the full list in Business Week for yourself. Some of the companies on the list have faced life or death challenged. They invested their way out to a brighter future. This spoke to me and the challenges newsagents face – except that we are not investing our way out. Our shop fits are, for the most part, not changing. Our product mix is, for the most part, not changing. Our margins are, for the most part, where they were twenty years ago. Our operating costs are worse.

How great would it be for Australian newsagents to be judged the most innovative retailers? For that to happen we need to boldly act and invest – in our own businesses and collectively.

Newspapers are doing it tougher in the US than Australia with many dropping circulation and ad revenue at alarming levels.  We’re insulated here by a cost effective (for publishers) home delivery network, a strong national retail network and the natural delay of trends hitting our shores.   That said, newsagents should read Ted Leonsis’ 10 plan for reinventing the newspaper business.

I was first introduced to Ted ten or eleven years ago during a 3 year (part time) entrepreneurship program I undertook at MIT in Boston.  The Birthing of Giants program was organised through Inc. magazine.  The sessions were inspirational.  My recollection is that ted Leonsis was a visionary thinker, still is.  He helped shape the thinking of the class, to see beyond the challenge and through to the opportunity. If you read Ted’s blog post about reinventing newspapers you’ll see he has not changed – his proposals are bold and while others have suggested some before, his pitch is clear and compelling.

Leonsis’ ten point plan could apply to Australian newsagents.  It is relevant to my post couple of days ago about why newsagents should buy borders.  We will find our future by being bold and acting collectively.  Every day we act alone and with our eyes focused on the next stp0e in front of us is a day lost.

Publishers have serious challenges in the US and, soon, here in Australia.  They will develop solutions which suit them, as they should.  At some point, the solutions they will pursue will shift in core focus from our channel.  This is what we have to be ready for.

We need to be talking today about the relevance of newspapers to the newsagency of the future.

We need to be talking about the shingle itself.  Is newsagent relevant?