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Newsagent representation

Fact checking Mathias Cormann’s claims about Bill Shorten and newsagents

On May 13, Mathias Cormann, Liberal senator for Western Australia and current Finance Minister tweeted: Bill Shorten confirms that he opposes tax cuts for newsagents, bakers, chemists and many other small businesses around Australia. here is a screen cap from Twitter

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The tweet was retweeted 19 times including by the official Twitter accounts of the Liberal party and the National party, follow politicians and others.

This tweet mentioning newsagents reached over 200,000 people.

I was curious about the tweet as I had not heard of opposition to tax cuts for newsagents from Bill Shorten, so I asked Mathias Cormann as question in report to his tweet, on Twitter: Can you please provide evidence of this claim?  I figured since he put the claim out there on Twitter this was the best place to engage with simon it as Twitter is a platform enabling conversations after all.

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I genuinely expected a response quickly. Cormann did not respond. In fact, I waited a week and then tweeted Cormann again:  I know you’re busy chasing re-election but we pay your wage. Please provide evidence of your claim. .

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As of this morning, Saturday, May 21, Cormann has not responded nor have any of his political allies engaged further on this thread.

All I want is the evidence on which Mr Cormann has based his claim. If you read the thread you will see people attacking Cormann on the issue, themselves making political statements. My two tweets do not make nor are they intended to make any political statement. I have only one question – please provide evidence supporting your claim.

Any politician engaging on social media ought to be prepared to respond to queries on social media. I consider a tweet to be like someone standing on a street corner, on a box, making a speech to anyone within earshot.

On Twitter, I am within earshot of Mr Cormann. I am in the crowd listening to him. He has made a statement and I asked him a question as anyone could do in a crowd listening to him on a street corner.

It is disappointing Mr Cormann has ignored my one simple question.

So, I hit the internet to try and find evidence supporting Cormann’s claim. The only evidence I could find related to Bill Shorten’s budget reply speech where he says Labor supports tax cuts for small businesses. he goes on to say: Labor will support a tax cut for small business – but unlike the Prime Minister – we will not use this as camouflage for a massive tax cut to big multinationals.

In this he is referring to the re-definition of small businesses to be those earning up $10M and the proposed ramping up of tax cuts through to bigger businesses as laid out in the Coalition government budget.

I searched the Internet using a range of search strings and the only reference I could find to Mr Shorten and newsagents was one unrelated story in the AFR.

The only justification Mr Cormann might rely on is the budget response speech. However that does not stack up for the vast majority of newsagents fall within the $2M turnover threshold supported by Labor on the matter of tax cuts.

It frustrates me when any politician from any party makes a claim about an opponent for which there is no evidence to support the claim. My frustration turns to despair for our country when a simple question to a politician asking for evidence of such a claim is ignored.

All I can conclude is that Mr Cormann does not have the evidence to support his claim that Labour opposes tax cuts for newsagents, bakers, chemists and many other small businesses.

Mr Cormann was happy to take the claim yet has not had the respect of democracy to show the claim is true.

All this matters to me because small business is a key topic in this election. This agenda was set in the Government’s budget. They put small business on the table in the policy debate. Labor joined them in talking about small business.

Any politician talking about their opponents and their small business policy ought to be prepared to back claims about opponents with facts. Regardless of who one votes for, the truth matters.

Footnote: turnover will only include agency commission. So, for lottery products, transport tickets, phonecard sales, mobile phone top up etc. you only include commission in your turnover figure.

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Ethics

MPA trial results provided to ACCC

Magazine Publishers Australia on Thursday provided a copy of the interim report by Boston Analytics into the trials undertaken recently into the supply of magazines to several groups of newsagents. Here is part of the public statement from the MPA:

The pilot delivered on expectations with substantial increases in efficiency i.e. decreased rate of return (-17% in Pilot A and B vs. +2% in Pilot A and +1% in Pilot B historical and -2% in control groups). Based on the modelling work done by Boston Analytics, sales were expected to decline at an 8% given the amount of supply that was cut from the long tail. But the declines were higher than that with Pilot A and B delivering -9% and -11% declines in sales respectively. Excluding an outlier store that increased its sub agents, Pilot A delivered -12% which is quite similar to Pilot B.

The value of the trials changed with the closure of Network Services. The single distributor model – yes, I am not including IPS as their roster of titles is very small – is of itself leading to changes we are seeing and changes on the way.

I think the best time to assess where we are at with magazine distribution will be sometime after June this year. By then Gotch will be well settled with its expanded mix of titles and will have had time to talk with publishers, especially those publishers that provide considerably more inventory than ever sells for its is these publishers that drive the most significant and expensive over-supply.

I have been aware of the pilot results for several weeks and while they are interesting, I am more interested in a study that actively includes all publishers and not just the top three.

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magazines

newsXpress marketing to newsagents

Here is the content of an email sent to newsagents last week promoting newsXpress:

Innovation for newsagents.

If you want new traffic, a higher than average gross profit, a fresh in-store look and excitement about the future of your business, consider newsXpress. here is just some of what we have delivered this year:

  1. National e-commerce strategy. newsXpress members are offering products for sale through a variety of websites connected to newsXpress member businesses. Members are thrilled to get news of sales overnight, while their shop is closed, sales with 100% of GP being retained by the members.
  2. Magazine incident reporting: an exclusive time-saving approach to handling magazine under supply, over supply and more.
  3. National Unicorn season. This innovative season, right after easter, increased traffic and drove excellent sales. With no competition.
  4. An interactive online calendar – never forget any deal, opportunity or season again. Delegate more easily. be more in control.
  5. Exclusive good margin dollar traffic generating product lines.
  6. The launch of an exclusive range of niche cards to be sold outside the card department to new shoppers.
  7. National catalogue strategy – 10 years old and still making good money.
  8. Full page advertisements in national magazines.
  9. Launch of a new local supplier in-store strategy.
  10. Regional member meetings – networking and business growth opportunities.
  11. Newsagency shop floor restructure for your Newsagency of the Future.
  12. Free access to labour rates and other HR assistance.

These are just the highlights. We have also engaged on behalf of our members with the ACCC on Tatts related matters and with senior management at Bauer and Gotch on the transition.

We would love to welcome you to our newsXpress community. Click here to read what newsXpress offers. Contact us:

  • National Sales Manager: Peter Francis. 0423 298 020.
  • WA Sales Manager: Lynn Martin-Brown. 0412 665 822.
  • Managing Director: Mark Fletcher. 0418 321 338.
  • Director: Graham Randall. 0419 711 153.

Four videos were also included in the email:

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newsagency marketing

What is the point of the ANF marketing?

Cf0TthHWcAAGRWw.jpg-largeThe ANF is pitching this ad on social media. I guess they are doing this so they can say they promoting newsagents. While the message is not one that is ideal, in my opinion, for the channel, the bigger problem is the branding. The N means nothing. There is no discipline associated with it, there are multiple versions. I suspect the majority of the 3,500 newsagencies in the channel do not use it. The ad is is not promoting something delivered with consistency. It has not been thought through.

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marketing

Newsagents need to look at the growth of On The Run in South Australia when contemplating dual standards of Tatts Group

On The Run, owned by Peregrine Corporation, is a chain of convenience stores operating 24/7 across South Australia. The On The Run (OTR is how they refer to themselves) network is growing.

In an OTR store you will find all the usual convenience lines plus plenty more. The stores are modern, clean, well-laid out – best-practice convenience in my view.

Newspapers are accessible as is a good range of magazines. Where there is an OTR store, a high street newsagency is probably not needed for local destination newspaper and magazine purchases.  Given the South Australian newsagency model it does not surprise me OTR has flourished there.

Now, we see OTR challenging established retail newsagents. New outlets opening close to newsagencies and challenging the newsagency businesses for everyday lines like newspapers, magazines and lotteries.

The lotteries offer is what concerns me as OTR appears to be operating under different rules to newsagents, more commercially beneficial rules.

SA Lotteries is now owned by Tatts. What happens is South Australia is interesting as it is a common testing ground for many businesses. News Corp. for example, has tested new approaches and offers in South Australia for many years. Partworks are often test released in SA.

I wonder if the Tatts / OTR relationship is a test or trial of what we will see elsewhere Tatts operates.

I was in several OTR stores in South Australia yesterday to see first-hand whether they operated under different rules. What I saw suggests to me that OTR is treated differently to newsagents when it comes to:

  1. Counter space required.
  2. Shopper requirement.
  3. Non Tatts products in Tatts space.
  4. Posters required.
  5. Multiple use of the writing desk requirement.

I went to several outlets to ensure I was not in one ‘rogue’ operation. There was consistency in terms of space allocation, Non tatts products placed in locations that Tatts would breach newsagents for and considerably less visual nice than newsagents are required to spend money on promoting Tatts brands and products.

It is clear Tatts is happy with OTR and why would;t they be? OTR offers consistency that can come from a central managed business operation. Consistency appears to be important to Tatts than personal, local, service.

Here is what I saw when entering one OTR outlet:

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Here is a photo from approaching the counter inside the business:

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Comparing the space allocation to what Tatts has recently required of newsagents, the OTR space requirement appears to be around two thirds less. This significantly alters the cost basis of offering Tatts products. The closer proximity of other supplier product to the Tatts terminal helps OTR drive a deeper basket from tatts purchases, again enhancing the financial value of Tatts sales.

Is the OTR model a model Tatts would like to see nationally? While you can ask the question, I doubt anyone at Tatts would say. Their answer would be about the importance of newsagents to the company and that the requirements they have for newsagents are for the good of newsagents.

Any newsagent concerned about the direction of Tatts outside the newsagency channel should look a OTR and consider what could happen to their business is similar occurred in their area.

FYI, here is the pitch OTR make from their website:

Now you can play your favourite SA Lotteries games at a number of OTR stores, including Saturday X Lotto, Monday and Wednesday X Lotto, Oz Lotto, Powerball, Keno, Instant Scratchies, Super 66 and The Pools. Playing the lottery is easy while you’re On The Run!

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Lotteries

The ANF demands secrecy on its member Facebook group

Late to the party, the ANF recently established a private Facebook group for members. They allow posts from newsagents on the group unmoderated. They do not advise suppliers who are bagged out, they do not offer a right of reply.

This is bad form from an industry association as there appears to be no verification as to the honesty of claims critical of a supplier. However, the ANF has a track record for a lack of due diligence so their disengagement on the accuracy of supplier claims on the forums should not surprise.

The ANF appears to be more concerned about the secrecy of the forum. I say this based on this post recently by ANF CEO Alf Maccioni:

We’re thrilled at the way members are all assisting and supporting each other within this private members group—this groups exists as a safe and protected means for our members to consult each other and work together to grow your businesses. The majority of interactions are positive and beneficial to all members, we have however been made aware of at least 2 occasions where confidential information shared within this group has been passed on to outsiders. As this is a private group, please respect each other and treat everything you read within this group as confidential information. Continual breaches of trust will only result in lower levels of interaction and support from your peers. Meanwhile if we do discover who has passed on information in regards to any post from this page we will delete that user.

Alf is someone who, in my opinion, does not like consultation, debate or cooperation. He prefers to write a letter and say you are wrong on a topic but not engage in any discussion through which he might discover he is wrong.

This was evident through MPA magazine supply trial discussion. I challenged Alf to discuss the issues publicly. He ignored the multiple requests – even though the result would have been more informed members. It was as if he was scared that he might be found to be wrong.

To me, the approach of the ANF in relation to this page that allows ignorant and even false claims to be published is of itself a breach of trust.

I think the ANF obsession with secrecy is misplaced. I think it does not serve newsagents not newsagency suppliers with this obsession with secrecy.

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Ethics

How Tatts treats small business retailers

Check out this communication from Tatts to newsagent retailers:

Dear Retailer

Please be advised that Tatts Lotteries have outsourced the Responsible Play Audit and Retail Standards Reviews that were previously the responsibility of the Retail Territory Manager.  These survey audits are now conducted by an external company, Market Pulse, and are being rolled out across all Tatts Lotteries jurisdictions. http://marketpulse.com.au/

The surveys have been conducted on the Gold Coast and Brisbane CBD over the past 3-6 months and will be commencing in our area very shortly. These will be unannounced visitations and will occur on a minimum cycle of once every three months.  Retailers that do not show compliance to our retail standards will be visited more frequently.

It has been identified some stores are placing non-Golden Casket items in the dedicated Retail Image area.  This includes pens, key rings, magazines, confectionary stands, torches, postcards, drinking straws, etc. being positioned on the serving counter, bag rail, or spinner units and also allowing dump bins to block access to the counter or writing bench.

Please be reminded it is against your Tatts Lotteries Franchise Agreement to display non-Golden Casket items in the dedicated Retail Image area.   I bring this specifically to your attention as this will be checked during the visits and non-adherence to policy may result in possible breaches, non-renewal of franchise agreements, or in the worst case scenario, termination of your franchise agreement.

Market Pulse will also have the current Point of Sale planner off Retailers Web to check that your outlet is displaying the current marketing focus.  In addition, they will check that all lottery brochures, coupons and result slips are on display on your writing bench.

Audit results will be forwarded to the Tatts Group Senior Management Team and I will be following up retailers once results are received.

To ensure your visits are fully compliant, I ask that you check your Golden Casket area now and identify and remove anything that is not compliant.   If required, please order in any items as necessary through your Lotto Terminal to ensure the retail standards are being met.

Please find attached above the Responsible Play Audit checklist and Retail Standards Review for your reference.

Thank you for your assistance.

I wonder of Coles Express is treated the same.

retail space is expensive. The demands of Tatts that you not use ‘their’ space (for which they do not pay you) to only promote their product holds retailers back from maximising the opportunity.

The only test tatts should apply is are you performing at or above average in your area. How you do this should be up to you as the retailer.

This communication is paternalistic and disrespectful in my view.

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Leadership

Another reason to not pay there ANF $60 a month

Screen Shot 2015-11-26 at 8.36.00 pmFurther to my post today looking at what newsagents could spend the $60 a month is costs to be in the ANF, consider this promotion by the ANF of Hubbed. I think the ANF promotes Hubbed because of a commercial relationship, the details of which are not disclosed.

My view is that industry associations ought not promote commercial activities. They should not play favourites because when this happens they leave themselves open to a claim of bias.

they will say they need to engage in commercial activity to fund their activities. I disagree with this. Newsagents either want an association or not. Direct funding by newsagents should be the only source of income, for the sake of transparency and trust. Such a move would make the association a genuine servant of members.

Hubbed has competitors who do not get a look in with the ANF and the various communication channels of the ANF because they are not a commercial partner of the ANF.

Criticism I make of the ANF for their selective promotion of suppliers to newsagents is seen by some here as criticism of the association. Rather, I am critical of the use of the association as a commercial activity supporting newsagent suppliers they like for reasons that are not clear and transparent.

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Newsagent representation

What $60 a month could buy your newsagency and why it matters

$60 a month does not seem like much but play it out over a year and you have $840. Why $60? This is what ANF membership costs in some states.

When a newsagent asked me recently if I thought them joining the ANF for $60 a month was worth if, I talked with them about what else they could spend the money on.

Before I get to the list, I suggest newsagents think about what they get for the $60 a month it costs to be a member of the ANF. I cannot think of any tangible benefit. For all their talk of lobbying and representation on policy – the bread and butter of a good association – the ANF does not have anything to value to point to. So the question about the value of $60 a month is important.

Smart newsagents will take the $60 a month the ANF would have cost and invest this in new traffic strategies that add  value to their business.

Here is the list of how one could spend $60 a month that I discussed recently with one newsagent:

  • Facebook advertising. $10 can put an ad in front of between 5,000 and 8,000 people depending on your location. $60 can buy plenty of new eyeballs and eyeballs drive new traffic.
  • Google advertising. At between 3 cents and ten cents a click, your website, e-com site or other online presence could achieve 2,000 clicks and more. Each click could be someone new to the business and could result in feet through the door.
  • Visual merchandising. $60 a month could buy close to two hours in-store of a visual merchandising professional on a regular call cycle. This could be someone who provides you with a fresh look in-store as well as training for your people.
  • New product lines. While funding this from the monthly saving, over the course of a year, investing $840 in a new product line fresh to the business could generate More than $1,000 in gross profit and attract new shoppers to the business who also purchase other items that make the $840 investment worth in excess of $2,000. Yes, there are specific lines that fit this criteria. So, in year two, you’d have another $840 to invest as the first year’s investment would be paying for itself.
  • Dinner outside. Have a pub meal with your business partner away from the business, to talk about business. You are certain to look at the business differently and through the conversations reveal to yourselves valuable opportunities you might have missed without such time out.

Sure I could add other items to the list. I wanted to go for ideas that helped attract new shoppers and give the business fresh appeal.

I am serious in suggesting newsagents think about alternatives for the $60 a month they pay for the ANF as $60 a month invested wisely ought to deliver between three and four times the cost to the business.

Every dollar you spend is a business decision. Think about the alternatives and consider what you could do in your business.

The $60 spend is about relevance to your business today as it is only the money you make from the business today that matters.

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Newsagency management

Victorian newsagents: have your say about Citylink

I have been working on behalf of Victorian newsagents to address issues flowing from the decision by Australia Post to not offer Citylink top-up service. Newsagents have seen a spike in transactions, often incurring card processing fees that wipe out the small commission earned.

Rather than newsagents abandoning the service I have sought to talk with Transurban since they control the fee paid to newsagents.

The time-consuming process of exploring the matter and lobbying on behalf of newsagents has resulted in an opportunity to meet with Transurban to discuss resolving concerns of newsagents re credit card fees and related matters.

I have been asked to harvest information from newsagents. Please click here to take a short survey. The results will better inform the discussions with Trandurban.

I need your responses by mid next week. The more responses the more informed the discussions.

My goal is to achieve a better commercial outcome for newsagents.

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Newsagent representation

Taxi drivers decided to work on their businesses rather than demanding protection

Victorian taxi drivers have done a u-turn in dealing with Uber. Their focus now is to improve their service and be more competitive rather than expecting politicians to protect them. The CEO of their association spoke to this with the The Guardian:

“In 2015, if we’re not providing a service people want to use, then the amount of competition will see our industry decline,” Samuel said.

“We won’t let that occur. We’ve been around for about 150 years and have responded to many challenges over that time, and we’ll do it again.”

And then this:

“But there have been some shortfalls from drivers, and we’re trying to weed out those drivers,” he said.

The position reflected by the association is along the lines of what I have said recently about newsagents, tatts and the supermarket challenge.

The best way for any business to be successful in any negotiation is to be what the other side wants, and more.

The best way to win in any competitive situation is to be better than the competitor.

If the numbers don’t work, the best approach could be to walk away.

Being better does not have to mean being cheaper.

I urge newsagents to read about the dispute between taxi drivers and Uber and to consider the latest moves. I think it speaks to challenges we face.

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Newsagent representation

James Murdoch is right: we have to be disruptors

We have to be disruptors if we’re going to grow.

This is James Murdoch as quoted in a report in today’s Australian Financial Review. The quote equally applies to newsagents. We have to be disruptors ourselves. Some of us are, but not enough.

Being a disruptor means breaking free from expectations associated with your shingle. It means new suppliers, new products and new traffic. It means changing how you run your business and how you think about your business.

It means identifying less with the traditionalists who share your shingle.

Being a disruptor means you becoming your own competitor.

Being a disruptor means you stop complaining about others taking business from you and you taking business from others.

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Newsagency challenges

Do newsagents think taxi drivers should be compensated over Uber?

Taxi drivers are waging a campaign for compensation over the introduction of the competitive Uber service. Ross Greenwood has has a bit to say about this on Macquarie radio. Taxi drivers have step and association and a website to make their case.

If the federal government provides any form of compensation for the introduction of Uber, newsagents ought to urgently make representations for the situation of taxi drivers today is the same as newsagents faced in 1999 with the federal government facilitated removal of our monopoly.

Prior to 1999, newsagents had a ACCC authorised government facilitated monopoly for the distribution of newspapers and magazines. Many purchased their businesses with the knowledge of the monopoly. banks funded the purchases with the knowledge. Immediately the monopoly was removed newsagencies were worth less, goodwill dropped.

Newsagents received no compensation. Some newsagents at the time claimed this wad due to poor representation as it was not long after the federal government paid pharmacists to close to reduce oversupply.

My question today is – what do newsagents think about the claim by taxi drivers they deserve compensation for the watering-down of the protection they have had?

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Ethics

I urge magazine publishers to make newsagencies magazine specialists once more – ditch supermarkets

I response to the article in mUmBRELLA last week reporting comments about newsagents by two publishers, I offered to write in support of newsagents and with a suggestion on how to grow magazine sales and support small business newsagents.

mUmBRELLA published my contribution yesterday. In this article I call on magazine publishers to supply newsagents and not supermarkets, thereby refreshing us as magazine specialists, giving us commercial reason to re-engage with the channel and allowing us reason to support the category as professionals and not as competitors to better funded and better supported but less engaged competitors.

I am serious in this suggestion as I am confident that if magazine publishers were to supply newsagents and not supply supermarkets, newsagents would partner with them to arrest the sales decline.

Newsagent responds to magazine publisher complaints and advice

It is frustrating reading that magazine publishers bagged newsagents at an industry forum without newsagents having a reasonable right of reply. But maybe that is how publishers like it, maybe they don’t want to mix with newsagents. We do, after all, only sell 50% of magazines sold in Australia.

Nicole Sheffield, the CEO of NewsLifeMedia says we need to exert more control on the titles we receive. Ash Hunter, CEO of Hunterfive Group, says newsagents entering the channel are of a poor standard.

While these opinions could be factors in challenges for magazines, they are only opinions. Sheffield, Hunter and other publishers ought to look at the facts. They took what was a specialist channel and took from it around 50% of magazine revenue and gifted it to supermarkets and convenience stores.

This new competitive landscape facilitated by the publishers left newsagents with less profitable titles. Newsagents and now, finally, responding by reducing retail space and labour they invest in the magazine channel. This is causing newsagents to not display all the magazine inventory sent as they no longer have the space for it.

Indeed, there is a fundamental disconnect between the retail space available in newsagencies and the inventory sent. Talk to Gotch and Network and they will agree – they do not know the retail space allocated to magazines and that they do not know is not a factor in what they send. Nuts!

If Australia wants a profitable magazine publishing channel it needs a profitable route to market. Newsagents are the best opportunity. Plenty of them want to be the magazine specialist, a destination for the magazine shopper. But the numbers do not work. The numbers could work if publishers ignored supermarkets and helped direct more magazine traffic to newsagencies.

My proposal is simple – make newsagents the magazine specialists by only supplying them.

This single move, of choosing to place titles exclusively in the newsagency channel, would encourage newsagent support. I am not talking here about one or two titles. No, I am talking about hundreds of titles, popular titles, titles in the top 200 even. Place these exclusively in the newsagency channel and you change the game, you get the attention of newsagents, you push back against the supermarkets and you respect your product.

While I am confident that a bold move such as I outline here would benefit publishers and newsagents it would need careful negotiating, involving many titles and requiring thoughtful newsagent engagement. And, yes, there would need to be a discussion on margin. Rent and labour in retail are considerable expenses and titles not paying their way serve no purpose in any retail business. However, margin can be considered in various forms. For example, there could be a base stocking fee or some other levy to support the category.

If sought after product is only available in one channel then the two main parties to such a relationship, the publisher and newsagents, ought to benefit. We would have a shared commercial objective, far more so than exists today.

My call to Sheffield, Hunter and other magazine publishers with opinions about magazines in newsagencies is simple – engage with us, invite us to your conferences, work with us on a =n alternative model as the current model is not working for anyone. Oh, and don’t engage with the newsagent associations as they are out of touch on this and most other issues as history has shown.

Footnote: I’d love Nicole Sheffield to explain the News Corp. position on pricing Inside Out $2.00 a copy less in Coles than in newsagencies.

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magazine distribution

The scare campaign by newsagent associations has damaged the image of the newsagency channel

Newsagent associations in Australia are not helping their newsagents with their talking down of the channel by claiming damage will be done if this or that protection is not offered.

For much of the last year they have run a negative campaign about lotteries on the east Coast and the issue of whether tatts places products into supermarket owned businesses.

NANA, the NSW Association lead and the ANF nationally supported the claim newsagencies would close. This is what is feeding into media attention on any matter affecting our channel right now.

This week it was the closure of Taylor Square newsagency that brought out journalists asking if this was a tipping point. Last week journalists were asking if the closure of Zoo magazine was a tipping point. I am gad I was approached so I could provide my opinions on both news items.

While the campaigns by the associations have raised awareness of the newsagency channel, the awareness is about imminent demise if this or that does not happen. Embedded in the claims by the associations is that newsagency businesses are on the edge, close to collapse if one more thing does not go their way.

The image of our businesses as fragile is an image created and promoted by the newsagency associations.

Shame on them for talking us down and for using the claim of fragility to support regulatory protection. This is not leadership – it a declaration of defeat. Plain dumb. And now, in the press and on social media this week, we are seeing the success of the association campaigns, we are seeing that people get that the channel is fragile and will collapse if one more thing does not go our way.

The newsagency channel is not fragile. Newsagency businesses are not fragile.  Okay, some are. But these businesses are not the channel.

There are many strong and growing newsagencies. Newsagencies succeeding at attracting new shoppers and selling more to existing shoppers. Some are doing it without lottery products. Others have moved away fro legacy products into appealing ne product categories. Others finely balance between the traditional and the not so traditional.

Rather than talk about these successes, we again see this week calls for protection and the threat of closure.

What an utter failure of leadership and a waste of millions of dollars of newsagent funds in supporting these industry associations.

I urge newsagents enjoying good times to talk about them: to the local paper, on facebook, on Twitter. Talk about growth, a bright future and your relevance in your local area. Talk up your business and the channel. You don’t have to share the secrets of your success – but certainly share the good news of your success.

Bad news sells. This is why the shrill campaigns of the associations plays so well with the media. Those of us who are optimistic about the future of the newsagency channel need to talk about this to counter the work of those being paid to represent newsagents. We need to pitch our good news for the truth it is and for the future of the channel in the Australian psyche.

Unfortunately, newsagents are allowing the associations to get away with poor leadership. Some agree because they want protection from regulation while others shrug their shoulders and do not want to have to become involved to fix it. Me, I refuse to support it and have not been an association member for years.

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Newsagency management

My advice if you think closing and walking away from your newsagency business is the only option available to you

Taylor Square newsagency in Sydney closed Friday last week after decades of service to Darlinghurst locals, many who partied in the area and many more who travelled there for their unparalleled range of magazines. The Piggott family were passionate about magazines.

The report cites the NSW government lockout laws as a major cause of the closure.

While I understand the impact of the lockout laws on overnight traffic, they would have less effect on the main part of the trading day from 7am to 6pm when most business is done.

While I am sure the lockout laws played a role as did the messy and drawn out changes to Oxford Street, I think other factors played a role – magazine sales, newspaper sales, the positioning of the business in a changing retail environment and out of store engagement by the business.

The biggest challenge faced by Mark and John Piggott is the same faced by many newsagents – how to drive the relevance of the newsagency in a rapidly changing world. We talked about this in the context of the business many times over the years. Our discussions were based on an assessment of their own business data, evident trends forecast in their data, trends that lead to the closure Friday of the business.

I wish this business had not closed. I wish John and Mark were running a reinvigorated and reinvented business today. I wish they were running a new Taylor Square Newsagency that was known for innovation as well as maintaining a stunning range of magazines.

Several times over the years I pitched structural changes to Mark and John including:

  1. Reducing opening hours by carving out the late night hours that are not profitable.
  2. Replacing underperforming legacy categories and introducing specific new traffic generating lines.
  3. Cutting magazine space to drive a better return on space.
  4. Out of store marketing to reach new traffic – people not currently aware of the business.

I appreciate these four points are not as simple as they look. Embedded in each is fundamental structural change to the business to make it relevant to today. Take the second item, several times I looked at this business point two alone should have resulted in more than 50% floorspace change by bringing in completely new product categories to open the appeal of the business beyond those who still remember what a newsagency was from the 1950s and 1960s. Those customers are dying, we need businesses that are relevant to the those spending money today. They don’t care about the newsagency of yesteryear, they care about what they like today – regardless of the shingle under which they purchase it.

It is not my intent with this post to come across as someone dancing on the fresh grave of Taylor Square Newsagency. Rather, I want newsagents to use news of the closure to shake themselves into realising that it is not too late to change and that change does not mean ignoring key categories at the core of a successful newsagency, categories we need such as magazines, newspapers, greeting cards and stationery.

It takes guts to embrace and chase change. The sooner you engage with this the better. From where I stand, the best encouragement you will get will not come from traditional sources of newsagency management advice such as your industry association of the National Newsagent magazine – they are rooted in the past.

My inspiration comes from looking far outside the channel at trade shows for other channels, at other retailers and at trends online. We have to have the guts to play outside the limitations of our shingle. We have to have the foresight to see a business beyond the traditional. We have to chase customers never thought we could attract.

But most of all we have to do something.

Complaining is not a management activity.

Here is my top-level practical advice for any newsagent contemplating closing:

  1. Dig depict your data and look for green shoots of good news onto which you can attach growth.
  2. Stop doing what is not profitable.
  3. Be a retailer and not an agent.
  4. Find products that will generate traffic in your location.
  5. Refuse to be restricted by the shingle under which you trade
  6. Change, change and change your business.
  7. Join a marketing group or at least partner with an outside force that will challenge you and open you to opportunities you don’t see today.

There are plenty of newsagents enjoying good results and feeling optimistic. I think anyone can.

36 likes
Newsagency management

Unprofessional magazine display at a Coles supermarket shows why they should not get magazines

IMG_9791This photo shows how a Coles supermarket in Melbourne had Country Style magazine shoved into their magazine fixture yesterday morning. It was the second Coles I had been in in 24 hours with this magazine handled this way. This is appalling for Country Style and all magazines as it screams: we don’t care about magazines!

What does the publisher expect? – they sent considerably more volume than the space allocated for the title (because of the free shopping bag packaged with the magazine) and, I suspect, did not pay for extra space in Coles.

Yes, I get that the bag is a free gift and designed to drive sales. All it has done here is facilitate a messy display that disrespects the product.

In your typical newsagency you would not see this. We are more professional at handling magazine issues that require more space than usual for the title. Sure, we complain about it, but we do the work – because we are proud of our shops and how we represent what we sell. Some newsagents store the extra stock in the back room while others shuffle magazines around to accommodate a larger than usual issue.

The irony of the situation is that supermarkets like Coles get more money than newsagents from some publishers to support magazines yet they support the category with less care than newsagents. That is wrong and publishers ought to see it – but they won’t because they think they need supermarkets. More fool them.

Publishers who want their magazines handled professionally ought to quit supermarkets, support newsagents and fund newsagents so we can make a living wage from the category. This would be a win for the publisher and a win for newsagents. It would stop the mess in this photo at Coles, a mess that disrespects Country Style magazine.

What really galls me is the ignorance and arrogance of the publishers behind the MPA trial when they say newsagents need more training. This photo and what I saw in the other Coles show that oles staff need more training.

If you see similarly appalling magazine displays in supermarkets please send photos  to me so we can shine a light on this.

15 likes
magazines

Newsagents do not need more ‘leech’ products and services

I met with people in Sydney today who want to introduce a service to the newsagency channel. It is unlike any product newsagents sell or have ever sold. Further, it doesn’t fit with existing categories most newsagents sell. They have little money for promotion. What we need is 1,000 shops offering the service and that will make it successful.

They say they chose newsagents because we are small business people and are more likely to help their small business.

The last thing our channel needs is a service from which we make less than 10% and that relies on leveraging existing newsagency traffic to achieve revenue.

If the service was certain to generate net new traffic maybe and only then if the margin was considerably higher than 10%.

What worries me is that if the people I met today go to one or more of the associations representing newsagents they may get support if there is something it for the association.

We do not need more leech products and services – you know, products and services that rely solely on our existing traffic to be successful. I am not sure newsagent associations see it that way, especially those making decisions on behalf of newsagents who are not themselves newsagents.

Retail businesses in our channel need net new traffic. For the most part, achieving this is up to us, individually in our own businesses – based on our inventory decisions and our out of store marketing.

I do not see evidence that newsagent association folk understand the net new traffic imperative.

16 likes
Newsagency management

Helping a newsagent prepare for a GNS meeting

A fellow newsagent is meeting with senior GNS management Monday next week following comments on a blog post here. I have opened this thread for others to comment about what they are looking for from GNS operationally and product-wise that this newsagent could raise in their meeting.

I am happy to receive private comments at mark@towersystems.com.au. I will forward all these to the newsagent who has arranged the meeting.

Alex Stewart, CEO of GNS, has been active commenting on posts and comments here in a stand out model of transparency in our channel. Unlike the ANF and others Alex does not lurk in the shadows or duck for cover on issues within his remit.

14 likes
Newsagency management

How one newsagent leveraged the local paper out of Woolworths

A newsagent shared this story with me recently about how they won a local newspaper back to their business and out of Woolworths. In their own words, with identifying details edited out, here is their story:

One of the local papers some time ago put their paper in the local Woolworths supermarket located very close to my newsagency.

I had been approached by the newspaper some years ago to supply Woolworths as a sub agent to me. I let them know my disapproval of this at the time and they held off. While I was away from the newsagency later that year dealing with my mother’s terminal illness the publisher started supplying Woolworths direct. I subsequently pulled their paper from my shop and have not stocked it since.

Every six month on average since the publisher has asked me to re-stock their paper. I have refused. Three weeks ago, after a heated discussion with them about my refusal, I told them that if they were serious about their offer to support a local business then they should take their paper out of Woolworths with no chance of it returning whilst I am the local newsagent. To their credit they agreed and have pulled their paper from sale out of Woolworths. It has been very well received by my local customers and I have to give praise where it is due.

I’m not sure if the above is the first time this has happened and I don’t particularly care however it has been a great discussion point in my store. I’m not sure what the implications may be further down the line when one of the visiting product managers come to town and question it however for a short time since this happened it has been a good little win.

What a terrific story.

22 likes
Newsagency management

Making the case to Transurban for better commission on Citylink top-up

I have made a submission through Touch to transurban pitching for an increase in commission for newsagents from the current 55 cent transaction fee. I was invited to make the submission following several emails to management on behalf of newsagents.

Here is part of what I wrote:

Newsagents pay around $23.00 an hour for employees in their businesses plus on-costs of around 15%, making an hourly labour cost of $26.45.

A Citylink top up transaction takes up to two minutes, resulting in a labour cost of 84 cents. Even if my estimate up up to two minutes is out by 50%, the cost is 42.41 cents.

On top of the labour cost is costs covering retail tenancy, IT infrastructure, insurance and other business overheads.

Then, there is the cost of transactions themselves, banking costs for cash and bank fees for electronic payment methods.

These are all factors impacting the cost of doing business, the cost of offering the Transurban top up service.

Finally, there is the opportunity cost. This is a consideration in a newsagency that has transitioned from the old-school loss-making agency model to the new style retail focused model. In the former the average overall business GP is 28% whereas in the latter the average overall GP is 45%. However, in the latter model you spend more time with customers selling items priced at $200.00 and more.

Hopefully my submission gets the attention of decision makers in Transurban and that they at least explore the commission they pay.

Newsagents deserve fair compensation for their efforts. The 55 cent compensation is not fair in my view.

Why my bigger picture view remains that our future is not in agency lines, I do understand many newsagents rely on these. hence my support for a better deal for them through representations such as these to Transurban.

17 likes
Management tip

Can newsagents trust the ANF promotion of Hubbed?

Screen Shot 2015-08-07 at 1.05.53 pmIf the ANF wants newsagents to support them as an industry association they need to retreat for commercial activity. Yesterday, the ANF sent out an email to newsagents promoting Hubbed. The communication has no disclosure as to commercial arrangements between Hubbed and the ANF.

A while back, following an outcry from newsagents, the ANF said it no longer had shares in Hubbed.

The marketing material sent yesterday was sent by the ANF, is copyrighted by the ANF and the contact address is the ANF address. This suggests a commercial relationship between the ANF and Hubbed.

If there is a commercial relationship newsagents need to know about it so they can make an assessment of what the ANF says regarding Hubbed compared to other services the ANF may not cover at all in its various communication platforms with newsagents.

Newsagents interested in Hubbed may want to start with questions about what appears to have been a restructure of the business last year.

My personal view is that industry associations ought to focus on being associations rather than engaging in commercial activity.

For the record I have no commercial relationship with any service competing with Hubbed.

17 likes
Hubbed

Is the IBIS report on newsagencies based on flawed Hubbed pitch?

Reading the IBISWorld Industry Report OD5495: Newsagencies in Australia, I am left wondering how wide their research took them since they place considerable emphasis on the Hubbed Connect platform. There are nine references over 29 pages including this from page 11:

The Connect model, which is being offered to newsagencies, is anticipated to provide significant growth opportunities for outlets. The Connect portfolio is expected to offer consumers a one-stop shop for a range of products and services that they would previously have demanded from a range of alterative retailers. The Connect model is expected to reinvigorate the Newsagencies industry by proving scope for growth across a number of products.

It appears inadequate research was done when you consider this from page 6:

The Connect system enabled newsagency customers to undertake a range of tasks they would previously have done at other retailers, from bill payment to parcel shipment and photo printing.

Newsagents have had parcel shipment and photo printing for years.

The Connect related statements read like they are from Connect or their launch partner the ANF. Today, in 2015, I know of plenty of newsagents trying to ditch Connect but having trouble.

It is disappointing that the Ibis document has not covered more commercially valuable innovation being leveraged by individual and groups of newsagents. To me, the inadequate coverage means the Ibis report is not accurate, certainly not worth the $900.00+ price tag (unless you got it free).

The report was published to the ANF managed Facebook group and removed shortly after I wrote about it here.

5 likes
Hubbed
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