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

What is your take on the Fairfax strike?

Fairfax journalists working for The Age, The Sydney Morning Herald and The Australian Financial Review are on strike until Monday.

What do newsagents think about this?

My view is businesses need the freedom to make staffing decisions regardless of whether the decisions are right or wrong. So I support Fairfax management doing what they think is right. As a news consumer, however, I am drawn to sources I trust. Today, I trust Fairfax less because of losses from their editorial team. While I still trust them more than any News Corp. outlet, they are heading to a point where they are not in my top five go to news outlets.

At the heart of the issue is that people are not prepared to pay for the quality of journalism Australia needs. This will be realised in a time of crisis, when a scandal is uncovered that would have been discovered sooner had we had a strong fourth estate.

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Newspapers

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

Fairfax cuts editorial jobs, Coles cuts print advertising, newsagents cut print media space

It is a tough day for print media with the news that Fairfax is cutting 120 editorial jobs. Related, Coles has dramatically cut newspaper and magazine advertising. The mUmBRELLA report includes this:

Year-on-year, Nielsen estimates Coles Supermarkets has gone from spending around $100,000-$200,000 per week in January and February of 2015 to below $50,000 every week this year, except in the week leading up to Australia Day.

Smart newsagents are reducing space for magazines and newspapers – sometimes cutting titles other times fitting the same titles into less space to reduce operational overheads.

Without a doubt these are challenging times. Focussing on the cost base is important for if you don’t and the decline continues, the cost as a percentage of revenue increases at an alarming rate.

From a newsagent perspective, the biggest cost base is usually real estate. This is why magazine departments are moving, shrinking and being used more efficiently in well run businesses.

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Media disruption

Offended customers damage Spirit humour cards

12834499_961543323953043_180694993_nI have two or three customers who come into the newsagency and damage selected cards on the Spirit humour stand that offend them. Damage ranges from ripping to cutting. While I have others who turn the card around so the rear is showing, it is the deliberate damaging of stock that offends me the most.

This is a crime. I’d love to catch the offender and ask how they reconcile their wilful damaging of stock against their ‘offence’ at the image or words on the cards they have cut or ripped.

While I have encountered this plenty of times over the years, my business has recently been subjected to intensive complaints to the landlord about the cards and the landlord has forcefully relayed the shopper concerns. This coupled with more wilful damage is draining.

These zealots frustrate me. While we live in a country where we have freedom of expression, they are using physical damage and relentless complaints about my business to force me to live by their rules.

If I capture a video or image of them acting I will not hesitate to report it to the police.

While a small number of customers are offended by these cards, the vast majority are not offended. Indeed, sales are excellent. This is the site that matters. Better still, laughter from people shopping the stand tell us the range provides good entertainment for shoppers.

While I am expressing frustration here, we do not plan to reduce our commitment to the Spirit humour range. It is to valuable to us.

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Ethics

Pitch Men’s Style off-location

IMG_7520The latest issue of Men’s Style magazine is ideal for promoting away from the usual location – because of the Waleed Aly cover. Aly appeals to a demographic beyond those who might consider this magazine and this is why I suggest you move the title to get more people considering the purchase.

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magazines

Clever ad in Marie Claire

IMG_7513I like the ad inserted in Marie Claire magazine with the gold bubbles appearing out the top. It is different to the usual inserted card or ad, this should attract attention and get people noticing the ad. I also like the low profile – that it is not obscuring too much of the title behind.

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magazines

There has been a shift in what matters to newsagents

I am in the middle of participating in user meetings around the country with my POS software company Tower Systems. Today, I am in Canberra, where I will meet with 20+ small business retailers.

These sessions are being attended by newsagents as well as owners of garden centres, jewellers, bike shops, gift shops and pet shops.

It is a thrill to see the retailers from different retail channels interact with each other, learn from each other, share experiences and find common challenges.

What is most interesting is what matters to newsagents. Whereas years ago newsagents would want to talk about magazines, newspapers and channel-specific issues, at these sessions newsagents are more likely to talk about retail business marketing, inventory management, webstore integration and accounting software integration. They are more likely to talk about the future rather than the past or today.

The newsagent conversation has changed.

Many newsagents are no longer obsessed with newsagency channel specific issues. They are talking about issues that matter to all small business retailers.

This is a good move. It means we have more retailers in our channel than newsagents. I love that.

In one meeting last week a newsagent had an excellent discussion with a bike shop owner, learning plenty about attracting shoppers back into the business. In the same discussion, the bike retailer learnt a couple of management ideas from the newsagent. The interaction was terrific.

There is little happening in the newsagency channel that warrants us being insular. We can learn plenty from retailers outside our channel and others who will pressure us to play beyond what has been traditional for a newsagency. This is where the future is: new traffic, higher margin products and deeper baskets.

At the heart of our businesses, retail is retail. Our challenges of chasing new traffic, employee management, marketing, shop floor efficiency – almost anything you name – are the challenges of other independent small business retailers.

Networking outside our traditional channel is good for us and our businesses based on what I am observing. It is a thrill to watch this change.

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Management tip

News Corp. backs Newspower with exclusive promotion

News Corp’s South Australian outpost is supporting Newspower stores with an AFL promotion.

This is unfortunate as Newspower outlets in SA are limited – 63 in the suburban area from what I can tell. Locals tell me the Advertiser is available in four or five times more retailers than this.

When you unpack the information, this appears to be an odd promotion: get your paper from location a but to get the value offer for the Footy16 magazine you have to get to a specific store. It is as if they wish to ration access to the deal. The alternative is they think the deal is so compelling it will result in a flood of people to Newspower stores.

When promotions are developed by companies like News Corp. they are well thought through with a specific outcome as the goal. This ensures all actions are deliberate and focussed on the goal.

It would be good to see the data for engagement yesterday at Newspower outlets, to understand what was in this for News and for the retailers.

Did News expect this promotion to drive traffic to Newspower stores compared to other retailers selling the Adelaide Advertiser? If so, what is the point? If not, what is the point?

I could not find any support from Newspower for the promotion. Usually with a supplier / marketing group promotion there is promotional activity from both sides, to maximize value.

News Corp. in SA has tended to run its own race when it comes to these things. This has not resulted in the Advertiser performing particularly better than other News Corp. titles so the going it alone approach does to seem to deliver commercial value from what I can see.

Non Newspower newsagents have every right, in my opinion, to be frustrated with News for this promotion.

Here is the promotion as it ran in the paper yesterday:

ADV2

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Newspapers

If you have Star Wars Party Cakes

IMG_7563If you have Star Wars Party Cakes I suggest you either place it next to weeklies with the full cover on show or you place it at the counter as your magazine of the week. This is a title people will purchase on impulse. For a few seconds work you could achieve valuable impulse purchases and sell out! This is a better outcome than having to return the title.

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magazines

WH Smith on the march in Australia, challenging newsagents

WH Smith, the UK public company operating newsagencies in high street, shopping centre, travel and other locations worldwide is expanding its presence in Australia.

Through its WH Smith branded businesses to company is delivering a best-practice retail experience. I anticipate we will see more of these stores open in malls and even on the high street as the company needs critical mass for its model to work in Australia.

The Wild branded businesses are changing too. WH Smith bought Wild well over a year ago and in the last few months the company has rolled out more changes through the group, most evident in company stores.

While not a gift shop I like personally, the WH Smith version of Wild appears to be popular from a mass perspective. It sells (bland?) safe mid range gifts.

Wild was at the Sydney gift fair chasing retailers to sign with the group. This is the strongest sign yet of their desire to expand the group in Australia.

I have heard of Wild franchisees who say they are unhappy with the direction of the group but that does not mean the model will not work in Australia. WH Smith appears to be backing the company with considerable resources to support expansion. You only have to visit the most recent store openings to see best-practice retail in action.

You can also see engagement by WH Smith and Wild through their supplier relationships. They are tapping into more local suppliers and this is creating competitive tension for nearby retailers and for the suppliers involved. I know of one supplier that could suffer as a consequence of their growing WH Smith relationship. It is affecting my own buying decisions for sure.

The part of the WH Smith business that appears to be shrinking is Supanews. This is to be expected given the state of Supanews when WH Smith purchased it from the Gaskin family. I guess the same is true with the Kennys / Giftology business as that was just about dead when purchased too.

From what I observe, the WH Smith and Wild businesses are the ones challenging newsagencies the most. Take time to check them out, especially if they trade near to you. Look at them carefully as they are well-structured businesses with sound processes, consistent buying and a growing presence that will build shopper recognition and confidence.

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Competition

Save time and money, label fewer magazines

IMG_7594I was talking with a newsagent in Sydney today about their approach to labelling magazines. If they follow my advice they will cut their label printing by more than half. The money saved on labels and labelling with add to thousands over a year for this busy business.

In addition to the time and label cost savings, magazines will look better. take this copy of Yours magazine, it will look better without the label obscuring the masthead.

I urge newsagents to review the labels they print and to talk with their newsagency software company about cutting the labels printed.

You can still check off quantities received. Not labelling titles helps you eliminate a labour-intensive step in the process of putting magazines out. Every second saved makes magazines less of an overhead in the business.

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Newsagency management

Magazine readership

IMG_7614A Twitter friend shared Tweet this with me just now. Made me laugh.

A doctor’s surgery with a magazine from 1993!

It does make me wonder about readership data given that some magazines can go round and round.

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magazines

The easy magazine promotion in the newsagency

IMG_7506The most valuable magazine promotions are tactical promotions – deliberate placement of a title to drive impulse purchase. A successful tactical placement for us continues to be the placement of a pocket of That’s Life Word Search in front of That’s Life. We count how many we place in the pocket so we can be sure of the results.

A move like this takes a couple of minutes and, for us, it delivers an extra three to six copies purchased in a week. That is more valuable than some old school billboard-like magazine displays.

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magazines

The unknown Shopkins promotion fails to help the newsagency

IMG_7564Most people purchasing the herald Sun in the newsagency on Saturday did not know about the free Shopkins cards as part of the News Corp. Top Trumps promotion. We asked and most times the response was what? or huh?. We had a few people come in to collect the cards but not many.

There was no discernible for the retail business from this promotion that I could see. There should be though as that is the goal of these promotions.

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Newspaper marketing

Sunday newsagency marketing tip: create a unique magazine narrative

Take a careful look at the magazines you sell and pitch titles together to create a narrative unique to your business. For example, these three vintage themed magazines can be promoted together targeting vintage lovers while the titles themselves regularly sit in different categories of the magazine department.

IMG_7522

One way we can grow magazine sales is to stop pitching them as traditional magazines.

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magazines

Sunday newsagency management tip: ask for proof

A sales rep for a well-known gift supplier visited a newsagency last week and lied in order to get a sale. The newsagent made a call to verify the claim and discovered the lie. The rep lost the sale. When anyone makes a claim in support of a favourable decision from you: ask for proof.

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Ethics

New aisle end promoting magazines in the newsagency

IMG_7510We have moved newspapers from the entrance to the magazine aisle and replaced them with a selected range of magazines. Our focus on the top row, the row people notice first, is on titles unique to us, independent titles through which we pitch a point of difference.

The next shelf down is about eating healthy and the bottom shelf is about funky craft.

We have gone for titles with broad appeal.

It is essential magazine offers in newsagencies change regularly and that we do not engage in billboard type displays of magazines readily available in supermarkets. The more we promote titles unique to our channel the more attention we will get from publishers for the uniqueness of our channel.

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magazines

Leveraging Pacific Magazines nexus email facility

IMG_7514We are leveraging the Pacific Magazines Nexus email marketing in-store. We have printed an email promoting Prevention and placed it with the magazine. This is so those who may have received the email are reminded of it while browsing. We love the Nexus email service. It is free. All 1,000+ newsagents in Nexus should use it.

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magazines

This email is what a ransomware attack can look like

Screen Shot 2016-03-11 at 11.47.37 amClick on this image to see an email I received purporting to be from Australia Post. Checking the email address, the sender is lois@libero.it. This is not Australia Post.

If I clicked on the attachment in the email, the ZIP file, on a PC running Windows I would have been locked out of the computer and subject to a ransomware attack.

More and more newsagents are being affected by these malicious attacks, they are being locked out of their businesses.

You can avoid being hit by an attack by taking care with your emails.

  1. Do not click on emails or attachments unless you are sure of the sender.
  2. The ATO will not email you.
  3. Your bank will not email you.
  4. Australia Post will not email you, not like the example I have posted.

If you are not sure of the sender, ignore the email. Tell everyone who has access to your email. Lay out your ground rules and demand discipline.

Most ransomware attacks can be avoided.

For protection, backup your hard disk to a location external to your business. This could be a removable drive or a cloud based backup service.

Backing up your data to the hard disk will not protect you as this will be locked out by the ransomware attack. I know of a retailer who was backing up to the hard disk drive in their computer as advised by a local IT tech. This was bad advice. They lost all their data.

Here is another example I received this afternoon at 4:45PM:

Screen Shot 2016-03-12 at 4.49.34 pm

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Newsagency management

How newspaper publishers compensate newsagents needs to change

News overnight from Retail Newsagent in the UK:

Trinity Mirror announces retailer margin for 25p The New Day will be cut from 11.6p to 5.8p per copy.

While the new margin rate is reasonable as a percentage, it is unreasonable in monetary terms.

With real margins falling for small business retailers of newspapers here in Australia as well as the UK, we need to educate newspaper publishers to help them understand th real cost of these products in our businesses. We need to educate the through our actions.

Retail space is expensive as is labour. Costs are increasing here in Australia for both at close to 5% a year yet the real return we achieve from newspapers is falling.

Publishers address their own financial requirements through ad rates yet they squeeze small business retailers through cover price and permitted margin.

This is why newsagents are moving papers to locations that cost less and, in some cases, getting out of newspapers altogether. These moves are, in my vote, more important than any lobbying done by industry associations. Associations have failed on this for decades.

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Newsagency challenges

News Corp. undervalues newsagents with House of Wellness freebie

Screen Shot 2016-03-10 at 10.38.36 amNews Corp. is paying small business newsagents twenty cents per copy of The House of Wellness freebie handed out.

News Corp’s expectation is rooted in decades of history with our channel, history that is not so relevant today.

While some newsagents will like this type of campaign, most will not, they will see it as an annoying activity they have to undertake in the face of concerns at how News Corp. may treat them if they refuse.

For the twenty cents per copy, News Corp. expects newsagents to:

  • Receive the product and store it for up to a week it ready for the promotion date.
  • Put up promotional posters. Install promotional shelf wobblers.
  • Have the freebie on hand at the counter for give away.
  • Collect tokens from customers handed for redemption from customers who have not purchased the newspaper from the business.
  • Deal with freebie seeking customers who tend to be more demanding than people who actually spend moey with you.

If this issue of The House of Wellness freebie is like the last issue, it is an advertising catalogue.

In my opinion, the twenty cents per copy is disrespectful. It does not provide reasonable compensation for what is expected. It is not a socially responsible payment from News for what they expect of newsagents.

My other concern is the disruption to the business promoting something of little or no relevance. The posters and wobblers are visual noise distracting from higher margin products newsagents can sell. We need less noise and not more.

Newsagents who will hand our the freebie might consider doing so without the posters and wobblers. I can understand that. Others while choose to not engage at all, and I can understand that.

News Corp. needs to be more respectful of newsagents in structuring these marketing activities for its clients. They need to price fairer compensation for newsagents. Otherwise, fewer newsagents will participate and, I suspect, more of the freebies will end up in the trash.

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Ethics
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