A blog on issues affecting Australia's newsagents, media and small business generally. More ...

Strong digital subs growth for Fairfax

Fairfax this week reported strong growth in digital subscriptions.

In the six months to December 31, The Australian Financial Review, The Sydney Morning Herald and The Age grew their total paid digital subscriber base by close to 50,000, the strongest half in four years, taking total subscribers across Fairfax’s three major titles to more than 283,000. Digital subscription revenue rose 11 per cent in the first half in the metro business.

This is an excellent result for the company, even considering the cost of obtaining and maintaining digital subs. It is a base and it reflects migration from print to digital.

Whereas print newspapers are primarily an advertising delivery medium, digital news platforms have the opportunity to be primarily news and analysis delivery platforms, driven by demonstrated reader interest.

The Fairfax boss said the company has been able to use data to better understand exactly what readers want and give it to them in ways media businesses have traditionally not been able to.

“This feeds into subscriptions. If more of your revenues are dependent upon subscriptions and less on advertising, clearly, you’re going to be saying ‘well, what do our subscribers want?’ So the focus becomes on your core audience rather than a mass audience. This all evolves, we’re always part of an endless learning process.”

Newsagents with business models that rely on print need to read the details of the Fairfax results and contemplate the results in the context of their own businesses. There is much to consider here if your business is reliant on print related revenue.

The live question is with such growth in digital subscriptions and continued declines in print, when?

Note: in case the article is now behind a paywall, click here.

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Media disruption

The challenge of the permitted use clause in shopping centre leases

Major shopping centres can be fierce in their interpretation and regulation of permitted use clauses in leases.

The permitted use clause details what you can sell or offer in your business.

Some newsagents are coming up against permitted use clause challenges when they evolve their businesses in response to market changes. I have and it can be a frustrating and expensive experience.

The ABC recently published a story about a hairdresser who refused a girl a haircut based on gender, because of the permitted use clause in their lease.

Vivien Houston was a regular at Jimmy Rod’s Barber Shop in The Gap Village Shopping Centre.

But when she turned up for a trim recently she was turned away because she was female.

Jimmy Rod’s managing director James O’Brien said women were not able to have haircuts at the shop because of a new lease agreement he had signed with the local shopping centre management.

It is important that anyone signing a lease does so knowing the full implications of the lease and, in particular, the permitted use clause. If I was a hairdresser I would not want my business to be in a position of turning anyone away because of gender.

It is disappointing the landlord sought this type of restriction for the barber shop. However, it is not uncommon for landlords to set permitted use stipulations that look ridiculous and non-commercial  on small businesses. It is a cost of business for those of us who trade in shopping centres so I guess we often suck it up.

We are in a retail world of rapid and considerable change. Legislating borders is out of date with the retail situation of today.

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Newsagency management

Gotch lets newsagents down with My Little Pony Adventures part series from Eaglemoss

The My Little Pony Colouring Adventures part series launches next week. I expect issue 1 will sell out quickly for some stores while others will have returns.

I say Gotch has let newsagents down because of their typically poor and one size fits all approach.

I have had My Little Pony products from multiple suppliers in store for ages, products that appeal to kids and adult collectors of the licence, yes adults. I also have a permanent unicorn department in-store, which appeals yo MLP shoppers too.

Stores with this level of engagement could do far better with the launch that will permit with its one size fits all approach.

I’d prefer Gotch to:

  1. Invite store engagement months out.
  2. Allow us to set supply quantities, without argument.
  3. Give us a better price for firm sale.
  4. Guarantee replenishment through to issue #12.
  5. Guarantee minimum supply for the run of the series where we have confirmed putaways.
  6. Help newsagents with allied product supplier suggestions. While engaged marketing groups will be onto this, Gotch could too.
  7. Make it very easy for shoppers to find stores.
  8. Provide pre-launch collateral to facilitate preorders.
  9. Provide demographic and other insights to help newsagents understand the broader opportunity. My Little Pony has a broader appeal than as a kids toy or kids character.

Sure Gotch is a magazine distributor. See their website and see their claims of being specialist. A specialist business would do more than they have done in the lead up to the launch of this title. It is not enough in my opinion.

We are going all out as My Little Pony Colouring Adventures will drive traffic in-store. I say this because support for the MLP brand is strong, I do understand the demographic and I am already setup to leverage that into deeper basket opportunities.

To anyone at Gotch rolling their eyes, frustrated, angry or annoyed at this post – all I want is for newsagents to make the maximum amount of money possible. Your poor execution will not see this happen.

Check out a TVC from the UK launch to see why I think this part series will be a bit.

Check out collateral Gotch has shared with the public via their Twitter feed:

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magazine distribution

XchangeIT failed newsagents on the Gotch data change

XchangeIT claims for itself a key role in data quality when it comes to magazine supply and return data in the newsagency channel. It is the copy, meting out punishment for poor data.

Last week, in the middle of the Gotch data structure change, XchangeIT oversaw faulty data sent to newsagents. data contrary to what newsagents had been told they would receive.

XchangeIT communicated to newsagents through their own software. They did not tell the software companies, the parties to whom newsagents turn for any tech question on matters such as this. They turn to software companies as they are more likely to open hours newsagents are open and are more likely to answer calls when newsagents call.

The help desk team at my software company, Tower Systems, found out about the data problem when newsagents canned. They had to then track it back through XchangeIT. The time wasted could have been avoided had XchangeIT been transparent in a timely manner with those at the front line of helping newsagents through what was for plenty of them a stressful situation.

Poor job XchangeIT.

Footnote: All through last week, help desk call traffic was up every day by more than 300%. This is because of queries, uncertainty and nervousness. By the end of the week things looked good. However, this week, call traffic is up too as there were others who did not do anything and now realised they should have. This is frustrating.

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Customer Service

Tracking average sale value as a key business performance metric

I track average sale value for my stores when assessing business performance monthly, by day of week, quarterly and annually. It is a valuable metric and a useful target to best over time.

In one of my stores, the average sale value for January was $12.35. This is in a  business without lotteries, tobacco and convenience lines, where magazines and papers represent under 20% of revenue.

The $12.25 result is up 11% from the previous year for the same location. This increase is excellent as it records valuable growth before even considering transaction count growth.

Three key metrics to focus on in any retail business are:

  1. Transaction count.
  2. Average sale value.
  3. Overall gross profit percentage – a factor of buying and / or mark-up.

Focus on these and other metrics important to you will be strong.

I like the focus on average sale value as it is a simple metric, easily understood by all in the business and easily targeted for growth.

Product placement, customer service and the sales counter experience all play into maximising the average sale value  achieved.

Thoughtful adjacency placement can drive impulse purchases on the shop floor.

Helpful but not intrusive shop floor engagement can guide purchases to a deeper basket, which lists purchase value.

A cleverly structured range of counter offers backed by helpful over the counter engagement can see items easily and valuably added to the basket at point of purchase.

This is why I like the average sale value metric. It is easy to articulate these things to staff, easy to get them on board and working with you.

Track the value. Note it in a common place. Make it the focus of team meetings. Ensure people are as focussed on growing this as you. Share the goal and rejoice in growth. Work to understand any decline.

Also, know that it will vary by season. This is why year on year comparisons for the same period in the calendar year are important.

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Newsagency management

Burn!

A supplier at the Toy Fair in New York this week has posters on the outside-facing wall of their large booth inviting comment. This one re Toys R Us had one tough comment.

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Small Business

Tips on improving cashflow in newsagencies and small business retail

Following on from my post last Thursday, here are tips for improving cashflow, to make it easier to settle supplier accounts on time and thereby improve leverage for better deals and terms.

  1. Set a budget for purchases, focussed on what you can spend and when you can spend it based on accurately anticipated cash flow.
  2. Quit dead stock. This should be a quarterly process based only on what is not selling. Dead stock has no value. Even cents in the dollar realises some value.
  3. Have an employee theft mitigation plan. Employee theft usually costs at least two thirds of theft and total theft in a business like a newsagency usually costs between 3% and 5% of product revenue. Cutting theft can free cash.
  4. Trim your roster. Labour is usually the second or third highest operating cost in a business. Every hour saved is cash released for inventory.
  5. Move work from the back office. If you price goods or manage returns from the back office, shift this work to the shop floor. Sales will improve as a result. This can be done without any increase in costs.
  6. Chase a deeper basket. Increasing average sale value improves shopper efficiency. banking more margin dollars per purchase improves your cash position.
  7. Have a new traffic strategy. Every new customer is valuable. A retail business not pursuing new customers, outside the business, is a dying business.

While some of the tasks on this list will be unappealing, they are key to improving business cash flow and improved business cash flow enables you to pay for stock on time and this helps you run a business that is more appealing to existing and new customers. It feeds into greater success for the business.

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Newsagency management

More respected brands cross into retail, opening more opportunities for us

Stanley is the latest brand that I have seen cross into a retail offering. If the John Deere experience of a year or two back is anything to go by, Stanley will do very well because of the multi-layered appeal … as a straight out kids product and as a product that an adult who loves and uses the brand will buy for kids to bring them into their world.

It is terrific seeing adult brands leverage brand awareness for products we can sell as part of a toy / craft pitch.

Newsagencies are well placed to leverage opportunities in this area, as the John Deere launch showed. It was great at new traffic generation and shop floor impulse purchases, because of existing brand awareness and respect.

The gift segment of our businesses continues to evolve, which is good for businesses – especially as specialisation is more important than ever. Opportunities abound.

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Gifts

What do you think of the Powerball changes?

I have been asked by several people to start a topic on the Powerball changes, so they can comment. Here it is. For those unfamiliar, here is a summary of the changes, from an email to retailers from Lotterywest:

More overall winners
We’re improving the odds of winning any prize from 1 in 78 to 1 in 44.

Big Jackpots
Bigger jackpots that customers love.

More Winning Numbers
The new Powerball game will draw 7 Winning Numbers from a barrel of 35 balls (numbered 1–35). The Powerball will still be drawn from a barrel of 20 balls (numbered 1–20).

New Prize Divisions
We’ll be adding a new Division 9 to the game, helping to increase the number of overall winners in every draw.

Pricing update
To help deliver more winners and big prizes, the cost of entry will increase by 25 cents per game (plus retailer commission). 

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Lotteries

More suppliers moving away from offering trading terms

One way any business can among cash flow is to delay paying creditors. Suppliers often factor the average collection time into their business cost model. A challenge arises when the average collection time extends beyond the anticipated.

Two suppliers I spoke this week mentioned seeing significant increases in average collection time. Each saw it grow by close to 20% in the last year.

One supplier was now at close to sixty days for accounts with small business newsagents. Their response is expected to be an increase in the benefit for ‘early’ settlement, by 30 days.

The other supplier is looking at a price increase to reflect this growing cost of doing business.

Thee challenge is some of these suppliers, especially the smaller ones, are squeezed at both ends – on price and on settlement time.

I’d like to see suppliers give benefits to those who pay on time or early and penalties to those who pay late as it the late payers who impose greater costs on businesses. Those who pay early or on time should not suffer because of the late payers.

I get that small business retailers don’t always have the money to pay on time. However, making that the problem of a supplier is an unreasonable joist on the supplier, which they have to cover somewhere.

Tough as it is, if you think you may not be able to honour the payment terms of a supplier, don’t purchase or make other arrangements so that you can pay on time. To say to a supplier who has supplied that you can’t pay is unfair. You may think you have won when they agree to extended terms. The reality is there is a cost somewhere, to someone. It may not be obvious right away but there will be a cost.

I expect more suppliers will take a tougher stance on payment terms with more benefits flowing to those paying early or on time. This would empower these businesses, enable them to be more competitive in retail. This is competition at play. Smart suppliers will seek out these early / on-time payers as they will be more valuable to them.

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Newsagency management

Deconstructed pens popular but not seen in newsagencies

Officeworks is pitching deconstructed pens in this build your own pen display.

I have seen a similar pitch in stationery outlets in the US and Europe this year too. It’s a new thing in stationery based on all this activity, a trend if you will.

I am not aware of any supplier to newsagents offering build your own pens to retailers in the channel. Maybe we do it ourselves – if it is a trend and we want to be part of it.

At the two Officeworks locations I visited I noticed it in prime position, facing traffic as it enters each business. This says something about their support for the pitch.

Stationery has changed. Whereas in the past it was all about function, today, fashion is key. That is why these build your own pens are current and cool.

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Stationery

Would a business tax cut encourage you to pay employees more?

The Treasurer was on TV last night saying that passing a tax cut for businesses, including small businesses, would see the businesses increase wages. Maybe I am missing something for I don’t see the two as connected in this way. Wages are a pre tax cost of business.

If the government succeeds in reducing tax paid by business do you expect wages to increase?

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Newsagency management

A busy day for the Gotch change

It has been a busy day dealing with the Gotch data structure changes. Speaking from my own Tower Systems experience, help desk call traffic was up 350% as newsagents called to check that they were not making a mistake or to ask other questions.

As is the case with any tech change, it brings to the fore unrelated questions that users think may be related.

The situation was not assisted with inaccurate information being shared by at least one XchangeIT person for part of the day nor by Gotch sending a file unexpectedly.

Today was day one. Tomorrow will be as busy. Later in the week, issues will change as some newsagents who have ignored the digital and print communication realise they have arrived late at the party.

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newsagent software

Typo card prices up?

Typo has Valentine’s Day cards at $4.99. Most cards in the seasonal range at this price point are basic in their finish / treatments. The $4.99 price point is expensive when compared to cards in newsagencies with treatments at or close to this price.

If I remember correctly, last year they had three cards at $10.00 for Valentine’s Day. There is no sign of that price offer this year at the Brisbane CBD store, the same one I visited this time last year.

It will be interesting to watch Typo, it always is. I have a feeling they are changing their approach to cards based on the Valentine’s offer and what I saw in-store.

Typo is a tough competitor for newsagents on a range of fronts: stationery, art products and cards. Any move they make is relevant to our channel and ought be interesting to us.

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Greeting Cards

Do you have to pay employees to attend team meetings?

Yes, all employees, casual, part time and permanent, are to be paid to attend team meetings. Fair Work is clear on this.

A newsagency employee contacted me last week to ask whether they are supposed to be paid to attend team meetings at the business. They had been with the business for three years and had always not been paid or team meetings. A friend at university told them they should be paid. This is what got them asking me.

The situation is exacerbated by the need for them to travel 45 minutes to and from the shop. This makes it a three hour commitment to attend a meeting.

I suggested they contact Fair Work if their employer said no when they asked them, explaining what I understood but advising that it is best is FairWork advised them.

The challenge for the person who contacted me is they feared losing their job if they asked their employer to be paid. This led to a deeper discussion about the workplace and their situation. The discussion revealed other challenges: no regular payslip, being paid at the wrong level for the work allocated to them and the requirement they pay for uniforms.

I explained the law as I understood it and again suggested they contact Fair Work. If what I was told was true, there are too many problems I think to navigate this by talking to the employer.

After the call I did a quick calculation and figured the employer could be entitled to thousands of dollars.

Next time you host a team meeting, ensure people are paid or compensated in a way that is 100% acceptable to them, without any pressure from you.

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Newsagency management

Pitching Valentine’s Day in the high street

One of the benefits of having a newsagency with no agency lines is the flexibility to pitch what we want to passers-by how we want.

Here is out front window Valentine’s Day pitch in the high street store we have It is working a treat:

The concept is to kind of wrap the business in the love of the season. It is working in that people are coming in to check out what we have inside … plenty of new faces too.

Being the only shop in the strip shop location this committee to Valentine’s Day helps the business get noticed.

I think it is vital that we pitch seasons like this, out to people in the street as getting them to step through the front door is the most important action you can have them take. Once inside, the shop does (or, hopefully does) the rest.

Give the situation off th store sand the location of the counter we cannot display products in a boxed window. Hence the pitch las you see it in the photo.

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Greeting Cards

How to avoid hiring the retail employee who has failed elsewhere

It is only natural that people do not include anything in job applications that may hinder them getting hired when applying for a new position.

As employers we have to be vigilant in our review and research of each candidate on the shortlist for final consideration.

Here are some suggestions of steps you could take to reduce opportunities for hiring mistakes:

  1. Reject any applicant with unexplained gaps in their resume.
  2. If you have a good pool of applicants, reject friends of people who already work in the business.
  3. Ask them to bring photos from their previous retail roles showing things they have done.
  4. Contact employers for the last three years. Verify start and end dates. Again, be wary of gaps.
  5. Reject any applicant who only has traditional (old-school) newsagency experience.
  6. Ask specific questions:
    1. Do you have a police record?
    2. Have you ever been sacked? If so, why?
    3. Have you ever been put under performance management – i.e. issued a formal warning?
    4. Has a customer ever made a complaint about you? If so, what was it?
    5. Tell me two things you think could be changed in this business to improve it?
  7. If you have any doubt, don’t proceed.

Always hire with a period of probation. Use this to terminate anyone you are not complexity satisfied with.

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Hiring employees

Chasing interstate newspapers

I have been copied on a series of sixteen emails from Kenny Lu, a passionate newspaper reader, to publishers seeking easier access to Melbourne newspapers when interstate. I have also had several calls from Kenny on the matter. Below I share, with his permission and at his request, one email from Kenny that best lays out his request and proposition:

Dear Kammeron, Michael, Damian, Robert, Bryce, Venetia and Mark,

Firstly Brisbane, Gold Coast and Sunshine Coast also North Queensland that look I don’t want the Herald Sun to withdraw from the Queensland Market because I am a regular reader as a Home Delivery Customer in Melbourne that if I go to Brisbane, Gold Coast and Noosa I still get the Herald Sun but the problem is some Newsagency on the Gold Coast and Noosa shuts early than 1.00pm I have to say and the Sunday herlad Sun don’t arrive in the Gold Coast or the SUnshine Coast on time therefore that they should come in at 10.00am in Sunshine Coast, Gold Coast and Brisbane I have to say then and it annoys me well I will be annoyed if the Herald Sun/Sunday Herald Sun is no longer selling in the Queensland Market and I wanted the Herrald Sun to be sold in Queensland Markets as well as Cairns, Port Douglas and Townsville to be sold there.

I read that on the Australian Newsagency Blog there are:

https://www.newsagencyblog.com.au/2012/02/08/there-go-the-sales-of-the-herald-sun-interstate/

Well we wanted strong sales of the Herald Sun to be sold at all Brisbane, Gold Coast and Sunshine Coast newsagents and therefore for Victorians are holidaying or living in Queensland can get the Herald Sun and the Sunday Herald Sun easily then but we wanted it to come in the Morning like 10.00am in Brisbane, Gold Coast and Sunshine Coast Newsagencys.

For an example Tuesday’s Herald Sun comes on a Tuesday and no firm sales for the Newsagencys across Queensland and Yes we wanted the Sunday Herald SUn to come on a Sunday I have to say then.

Yes we wanted all Herald SUn and Sunday Herald Sun to be sold in Queensland Markets to arrive at 9.30am in the morning so Victorians can buy the Herald Sun/Sunday Herald Sun and I wanted the paper to arrive on the Gold Coast and Sunshine Coast to come at 10.00am for Queensland Markets and Brisbane as well.

Also for Brisbane that we wanted the Sunday Herald Sun to be sold at all Brisbane Newsagents for Victorians living in Brisbane or are on holidays and also at Airports.

Also we wanted all Brisbane Newsagencies to sell the Herald Sun/Sunday Herald Sun to be sold at Brisbane Newsagents on the same day so as Brisbane CBD all of them including the Sunday Herald Sun sold on a Sunday.

I do get the Herald Sun in Brisbane, Gold Coast and Noosa so far I get it at Rankins on the Mall, Benowa Gardens Newsagency, Pacific Fair Newsagency and Australia Fair only on a Sunday, Brisbane Airport Newslink at Qantas Terminal and the Terminal, Noosa Junction Newsagency and Noosa Heads Newsagency that is where I get the Herald Sun with THe Courier Mail and The Sunday Mail I get it there.

Yes we want to make it clear for Victorian visitors are in Queensland or lived in Queensland that we wanted the Herald Sun to be sold in all Queensland Newsagencies as well as Cairns, Port Douglas and Townsville because I want Queensland sells the Herald Sun and Sunday herald Sun and be arrived at 9.00am in the Morning for Victorians who wanted to read that paper.

I don’t want a demise of sales of the Herald Sun in Queensland so we wanted for Queensland to sell the Herald Sun and have more people from Victoria can get it.

I don’t want this crisis to happen or Victorians in Queensland won’t come and it will be hard for them so we wanted Victorians in Queensland to get the Herald Sun and Sunday Herald Sun.

Have they being any high and increased sales of the Herald Sun in Queensland? I get it there including Airports in Brisbane.

I being requesting what we want and Yes we would like a request for all Melbourne Newsagencies that they should sell The Daily Telegraph/Sunday Telegraph, The Courier Mail/The Sunday Mail/Gold Coast Bulletin and The Advertiser/Sunday Mail to be sold in Melbourne at all Melbourne Newsagencies for tourist and visitors can get their Newspapers also at Airports to be sold there.

I wanted this considered that we don’t want any demise of selling the Herald Sun sold in Queensland we wanted it on the same day so Victorians can get the Herald Sun like I get it in Brisbane, Gold Coast and Sunshine Coast can you please bring this e-mail up at the meeting because we don’t want this crisis that we don’t sell the Herald Sun anymore at Newsagents in Queensland we wanted more sales of the Herald Sun/Sunday Herald Sun to be sold at all Queensland Newsagents and more importantly they should arrive at 9.30am in Brisbane, Gold Coast and Sunshine Coast and at Airports.

I wanted all Queensland Newsagencies to continue to sell the Herald Sun/Sunday Herald Sun at Newsagencies and come earlier like 10.00am so Victorians can get the Herald Sun/Sunday Herald Sun there.

I supported the move and the continuation to sell the Herald Sun in Queensland Markets for Victorians getting the paper are tourists or living there.

I would like a response regarding this for News Queensland and HWT and this is serious and if I go to the Gold Coast, Brisbane and Noosa I get the Herald Sun/Sunday Herald Sun there as well as The Courier Mail/The SUnday Mail.

I love reading papers so much I enjoyed it.

I will hear from you soon.

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Newspapers
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