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This photo is from a colleague newsagent. It shows just some of the magazine covers they have to return as part of the arcane unsold magazine returns process that applies to newsagents and not their key competitors. I am writing about this today because of the discussion from my recent post: What happens to magazines newsagents don’t sell and why are newsagents treated differently to supermarkets?

The stack of magazine covers have been ripped off magazines that failed to sell in the newsagency. This newsagent is permitted to return covers for some titles. For other titles they have to return the full product.

Some publishers see the sending of covers as a benefit for newsagents. Hell no! It is a cost our big competitors do not have.

Besides taking the title off the shelf and removing the cover, we have to post the covers to the distributor. This can often involve more than one envelope. Distributor processes being what they are, many newsagents send them in expensive Express Post envelopes.

• All of this for products that failed to sell.
• All of this for products over which the newsagents funding the work have no control re the supply volume.

These points are some of the reasons newsagents remain angry about the out of date magazine supply model. They are also points about which some magazine publishers are ignorant.

While publishers have benefited from deregulation, newsagents have received no benefit whatsoever. Indeed, the model we are forced to endure disadvantages us when compared with our big competitors.

Small Australian magazine publishers take note – this is why more newsagents are significantly cutting magazine space.

Returns ought to be eliminated immediately, unless publishers, distributors and newsagents agree to a model where newsagents are the exclusive retailer of magazines.

As newsagency businesses change, new traffic is found from new products categories and overall business GP % increases from selling higher margin products, it is only natural we look more carefully at the operating costs of low margin products over which we have little or no control. This is a consequence of deregulation – but it has been slow in coming for the channel.

Seeing this used coffee cup on the shelf of a Coles supermarket reminded me of the challenges we face in retail of shoppers who treat our spaces as a dumping ground for trash. Too often we pick up all manned of things deliberately discarded by shoppers in-store. Scraps of paper, empty cans, used tissues, empty coffee cups, gum and, yes, even used nappies.

There is not much we can do about this unless we see the person trashing first-hand. Rather, we have to pick up the trash and ensure we offer a clean and healthy space for the majority of our shoppers who respect the place we provide for them.

I have sometimes gone back through CCTV footage to find the person who left trash in the shop but I soon realised it was not worth the effort – because once you have the vision, what do you do with it? They have not committed a crime. While you could post it on social media that could make you look worse than them.

Much as it galls me, I think the best approach is to suck it up and move on.

People at News Corp. was unhappy enough with a question put by Duncan Storrar to Assistant Treasurer Kelly O’Dwyer on ABC TV Monday night to dig into his past for material for what looks like a smear campaign across the company’s mastheads.

Storrar’s question – You’re gonna lift the tax-free threshold for rich people, why don’t I get it? Why do they get it? – resulted in a poor answer from O’Dwyer that hurt her cause.

Today’s coverage by News Corp. appears to me to be designed to damage the reputation of Mr Storrar. It is a personal attack in page one of newspapers when there are far more important page one news stories.

Mr Storrar’s past has nothing to do with this story, it is not news. News Corp. is again using its newspapers for partisan politics. Shame on them.

Is this a newspaper we should censor and not put on the shelves today?

Fairfax is taking a different approach on this story, looking at the Q&A interaction as news.

The success of your retail newsagency depends on you having the best people working in the business, including you. Rate everyone, including you. If they are not the best, if they are not what you need, your challenge is to address this. No one else will, it is up to you.

Most newsagents will get tomorrow off. Have a good break even if you find your mind on the business even when you are away from it.

Happy Easter whatever the season means to and for you.

VANA, under their parcel brand of Nparcel, yesterday sent out an email to newsagents claiming the ANF endorsed and promoted Hubbed is ‘piggy backing’ off the VANA platform. Yesterday’s email was a follow up to an earlier email. yesterday’s email was explicit in its allegations:

Further to our previous communication regarding other providers piggy backing off our industry platform (CLICK HERE), we are of the understanding that a parcel provider (HUBBED) is allegedly continuing to solicit our members.

As advised by our members on multiple occasions, it is alleged that the above mentioned company may be sending out free hardware without obtaining authorisation from newsagents.

Upon further investigation, we have discovered that their assertion of free hardware and no cost may be misleading. In reality, it appears the hardware is linked to a repayment structure whereby newsagents forfeit approximately 50% (capped at $100.00) of their monthly commission as they transact over time.

While this looks like a commercial dispute between Hubbed and Nparcel, it could also be seen as a dispute between the ANF and VANA in that the ANF launched Hubbed into the channel long after Nparcel was established by VANA. Further, I think the ANF launched and endorsed Hubbed on the basis of a commercial relationship. At the time I asked ANF representatives to outline the due diligence of parcel platforms on behalf of newsagents. From what I understand, none was undertaken.

Hubbed has had a rocky road with the ANF reportedly handing back their share of the business but continuing to support and promote Hubbed. Matt Handbury, an original investor in Hubbed quit the company and, as I understand it, remains in dispute with them.

Hubbed took on a new investor this year in the form of Singapore Post through their Quantium Solutions taking a 30% share.

In the meantime, newsagents have contacted me saying they are unable to get out of the Hubbed contracts as promised by the ANF.

The ANF and VANA need to deal with this mess and deal with it in public view of all newsagents. However, I doubt that will happen. If the ANF follows their usual playbook, they will say nothing, ignoring the whole issue. Their lack of transparency on these types of issues is a well practices game.

While the newsagency channel contracts, it is ridiculous that the two largest industry associations, who claim to be partners, take such a different approach on parcels. That they do speaks to a split in leadership, a split that costs newsagents.

The directors and VANA and the ANF need to explain to newsagents why they allow this split, this competition between the associations, to continue for along as it does it provides another example of why newsagents should to fund the associations. For all their rhetoric about unity in service of newsagents their actions speak to other focus.

For the record I think parcels are not core to the future of a newsagency. While they can play a role, the traffic they generate is not as valuable as plenty of other new traffic newsagents can generate. Associations ought not involve themselves in any commercial activity. Rather, they should spend their time on representing newsagents on policy and other traditional association matters.

Footnote: I have no commercial interest in these businesses or any parcel business.

People at News Corp. must think Australians are idiots with their continual spin against state and federal labor parties. They pass off as news made up headlines and stories. Yesterday’s Herald Sun front page story was typical News Corp. nonsense. It is a headline driven by the Auditor General’s report into the East West Link. I have read the summary of the AG report and listened to and read several news stories.  Only the Labor hating News Corp paper saw the story this way.

The Herald Sun coverage is not news, it is biased and unprofessional.

News Corp needs to stop expecting newsagents to be the pushers of their brand of politics.

Footnote: this post is about the editorial content only, not the circulation people or processes.

I was in Hong Kong at the start of the week for the Gift Fair and met up with plenty of Australian suppliers there sourcing products for our market for 2016.

I appreciated the opportunity of sharing products I liked the look of with suppliers who could themselves see the products in Hong Kong and consider them with a retailer’s endorsement.

Importing is a complex and fraught process. You need to commit up front to large quantities, negotiating with companies that may have differing quality commitments to what they show you and doing this is a situation where copying others is rampant.

Get it right and you can make a lot of money. Get it wrong and you warehouse in Australia will be stocked with goods that do not sell for years.

I’d like more suppliers to meet retailers in Hong Kong. I think such co-operation would lead to more successes for both.

Click here for a FAQ doc. from News. It answers some of the questions being raised following my earlier post. The image is from a letter sent with a contract termination letter.

The move by News Corp. in Townsville is real, it has a timeline and the first steps of implementation have been taken.

Newsagents the world over are told by some existing and would-be suppliers: you will win because this product / service will drive foot traffic. We know from our own basket analysis data in Australia this is not true for transport ticket top-up, newspapers, lottery products and bill payment. They are all inefficient in terms of basket mix yet suppliers continue to beat the foot traffic boost drum.

Newsagents in the UK are concerned about foot traffic (footfall) in their current challenges with the PayPoint bill payment and parcel service according to an article at BetterRetailing. The article is interesting as it puts data on the table in analysing the knock-on benefits of PayPoint in a business.

Where newsagents are asked to take on low margin products or services there needs to be more than a claim by a supplier about foot traffic. They need to back the claim with evidence and to agree or a reasonable KPI below which the fee they pay increases to make offering the service financially viable to newsagents. That said, my preference is that from the get go the fee paid represents fair compensation for costs of servicing the transaction including labour, prime space costs and opportunity cost relevant to what else could be achieved with that space – plus a margin.

Foot traffic of itself is not useful for any business. The traffic must be relevant to the business. Newsagents ought to be wary of a foot traffic benefit claim where there is no analysis of the deeper value of the specific traffic expected to be generated.

If you have a website for your newsagency make sure it is mobile device friendly for if it is not Google will downgrade your ranking. If you are not sure, use the Google test tool. You do not want the results I found for one site I checked this morning. Sites that are not mobile friendly reflect businesses that are not up to date and not easily accessible to people on the go.

The ANF supports the MPA trial as it is better than nothing and so data can be gathered. Despite offers, the ANF has not considered the excellent data in newsagencies. This image is a screen shot from a newsagent showing appalling behaviour by Network services in grossly oversupplying Muscle & Fitness magazine. From March this year Network started increasing supply despite their being o evidence. This poor newsagent is now suffering an increase from 3 copies to 9 copies. No wonder they are early returning.

Shame on Network and the publisher for enabling this situation. Shame on the ANF for not using this data to support action by newsagents to stop this behaviour.

While I am no lawyer, this evidence and thousands of examples like it could be harnessed for newsagents to bring acton against the distributors that consistently oversupply in the face of evidence indicating that there is no justification for this.

Every few days I receive schemed shots like this and reports showing consistent and growing oversupply. This evidence outs appalling behaviour yet it continues – on our channel and not on those we compete with. It is breaking newsagents.

New York based fashion designer Kate Spare has released this pack of pencils which I have seen in several different shops in the US. $2.00 a pencil is a new benchmark by Australian standards.

Priced at $20 it shows how adding fashion to an everyday item can change the shopper and the price you can achieve.

To all the newsagents here – have a well deserved day off. To everyone else – relax and enjoy the day!

Merry Christmas!

Check out this excerpt from Chapter 3 Innovation of the Murray report – the final report of the Financial System Inquiry:

The Inquiry’s recommendations to facilitate innovation aim to:

• Encourage industry and government to work together to identify innovation opportunities and emerging network benefits where government may need to facilitate industry coordination and action.
• Strengthen Australia’s digital identity framework through the development of a national strategy for a federated-style model of trusted digital identities.
• Remove unnecessary regulatory impediments to innovation, particularly in the payments system and in fundraising for small businesses.
• Enable the development of data-driven business models through holding a Productivity Commission Inquiry into the costs and benefits of increasing access to and improving the use of private and public sector data.

These recommendations will contribute to developing a dynamic, competitive, growth-oriented and forward-looking financial system for Australia.

In our channel we have accurate data flowing between supplier and retailer, data that can drive efficiency for all stakeholders. Yet it is not used for to do so would reduce the income from one stakeholder.

While there is mucking around going on with magazines at the moment because of the code of conduct moves, it does not go as far as the world envisaged by Murray and others who worked on the Inquiry.

The current approach to using newsagent magazine sale and return data impedes our channel, it makes us less competitive. Murray would not be impressed.

The Who cover story on the passing of Phillip Hughes was timely and respectful. It’s one of their best issues of the year, showing how a magazine can stand apart with coverage of a major local news story. Well done to everyone involved. We embraced the opportunity with full cover placement with weeklies and with newspapers.

It was a thrill to see earlier this week some of the new Star Wars products to be launched shortly. While the majors have been and will continue to be all over Star Wars, we have an opportunity to play in this space in some gaps left by the majors.

For newsagents to get the most of these major brand opportunities they / we need to engage with suppliers more directly and not so much through agents and wholesalers who bundle toys from various suppliers.

The best way to leverage mega brands like Star Wars is for us to get closer to manufacturers. This is a space for the marketing groups as they can pitch to these large suppliers on behalf on more and in a way that is of interest to the suppliers.

Hubbed appears to have let the domain for its blog expire, taking it offline. While not a big deal, it shuts down a communicate channel the company had used to promote Hubbed to newsagents. This is happening at a time where there appears to be a shift in the services mix promoted by Hubbed.

This ANF endorsed and promoted business started out seeking long-term financial commitments from newsagents for computer based kiosks for handling bill payment and parcel services. Now, it appears to be more focused on a missed delivery parcel collection service for which no technology kiosk appears to be necessary.

A newsagent spoke with me last week about the challenge of getting out of paying the lease on the kiosk which is not earning the business any money. I suggested they speak to the ANF since it was their endorsement that encouraged them to sign the long term lease finance agreement.

A letter from the Victorian Minister for Gaming Regulation to Intralot outlets opens an issue of concern for newsagents. The last paragraph on page one of the letter notes Tattersalls will offer current Intralot outlets the opportunity to become Tattersalls outlets.

I know of newsagency businesses with Tattersalls located next to or near supermarkets that have Intralot. What will happen there if those supermarkets take up the offer to which the Minister refers?

I have been approached by several newsagents in Victoria about this letter. They are most concerned. here is what one newsagent has said about their situation:

This is a concern for us as we have a IGA Supermarket in the next town 5 minutes away which currently sells Intralot products only. In the past they have applied for a Tatts license, but were denied because Tatts recognised that there would be no benefit to having an extra outlet in country towns on a 10km stretch of highway (there are already 2 including our newsagency).

If this letter is to be believed, they would now be given the right to sell all Tatts products, which will have a significant impact on our lottery sales. We will be meeting with our local member for parliament and with our Tatts rep to discuss this issue.

I expect a letter like this would have gone through several reviews prior to release.  If it means what it says then newsagents with Tatts and a supermarketer other retailers nearby selling Intralot ought to be concerned.

If I was in this situation I’d write to the Minister for Gaming relation immediately, seeking urgent clarification.

We also have Better Homes and Gardens with Newspapers. Stock counts tell us this is working a treat for us. While it’s a bigger pack size and we have space for less stock, that it’s exclusive is the winner for us here.

Our sales were up 15% year on year in the September quarter. This is an excellent result which I put down to a combination of a terrific in-store offer, excellent staff and our discount voucher loyalty program.

Indeed, discount vouchers are driving basket depth, shopper return and bringing in new traffic thanks to word of mouth. The discount vouchers are getting destination shoppers shopping more of the shop.

Nowhere is the value of discount vouchers more evident that weekly magazines – up 12%. These are retail only sales by the way. Everyday counter cards are up 10% and stationery up 27%. Calendars are up 28% on last year and in the transactional data I can see the vouchers driving this.

The keys to success are clarity of the discount voucher offer, consistency of the pitch, generosity in value and pulling levers in your software to drive higher margin business.

In addition to the 15% increase in revenue there is excellent growth in gross profit.

POS Solutions published yesterday a post about a newsagency pulling out of what they call discount coupons. In their blog post they link to a previous post of theirs where they refer to a report about my business and suggest that the discount vouchers are not delivering the benefits I say. The evidence does not support the claims they make. It is unfortunate that they have published what they have as it distracts from the truth.

Newsagents need to choose the best loyalty solution for their business. This choice requires thorough research and talking with newsagents with experience. This is why I have published my results here over the years, to be transparent.

The Tower newsagency software offers four different types of loyalty facilities of which discount vouchers is one. I am confident that right now discount vouchers is the best practice approach for newsagents. The success is a combination of good software, properly and fully used in a well run newsagency with a good range of product.

Using discount vouchers or discount coupons in a poorly run business or in software that does not have appropriate business levers will not give you the results I am seeing. It would be wrong to assume that all discount voucher / discount coupon facilities are the same.

I like the Peppa Pig products from Network Services. They are a terrific addition to our Peppa Pig range. Yes, I don’t like the low margin … I wish I was making the 50% and more off these that I make off other Peppa products. But it’s icing so I’ll put up with the inadequate margin for now. We have these items at the counter as they don’t fit on our existing Peppa stands.

Like plenty of newsagents I am sure we received stock of The Queensland Country Women’s Association Cookery Book yesterday.

Network crows that delayed billing is to assist in maximising your sales. It’s delay billed to try and stop us early returning.

Here are my specific issues with issues with the scale of of The Queensland Country Women’s Association Cookery Book to newsagents:

1. This is a book and not a magazine. We should be getting a book margin.
2. I have this title in other forms. I have country favourite Aussie cookbooks –  from which I make boot margins.
3. My food section is full. There is no room for a new title.
4. It’s full copy return. I am fined if I send this back!
5. I had no say in supply. This is my money at risk yet Network spends without a care in the world and then comes chasing if I am late. All care and no responsibility.

The newsagent magazine distribution model makes it too easy for a new title to be scaled out with us taking the risk of time and space so a publisher can test a title and the distributor can gets their fee.

Given I have to allocate a new pocket, I should be paid $2.00 a week whether I sell a copy or not.

There was a time when newspapers valued their mastheads. Not any more apparently. They prefer to cover them with ads that end up as litter when readers rip them off while walking out of the shop. Shame on those responsible at The Weekend Australian.