I am disappointed to see an ad stuck on the front page of the Sunday Herald Sun today, partially obscuring news. So much for news being important. This type of ad leads to litter, covers news and disrespects the masthead in my view.
With the news yesterday of redundancies at Australia Post and the talk of corporate store closures, I’d be interested to know your thoughts on purchasing a government owned Australia Post retail outlet and merging this with your newsagency.
A few years back when I had one directly opposite me at Forest Hill in Victoria and experiencing their aggressing price competition on stationery, cards, ink and some services, I went on the record saying I;’d love to merge their business with mine.
Now, I am not so sure.
The next Newsagency of the Future workshop is Wednesday July 1 at 11 am at the Surfers Paradise Marriott. Click here to book. It’s free. As with each workshop, this one is an evolution from the last (in Cairns last Saturday).
The content evolves as more insights are gained and more data harvested. The changes reflect the changing nature of opportunities before us and the truth that there is no destination for the changes ahead.
I mention the lack of a destination because it would be wrong for newsagents to think that there is a magic pill to fix all that needs to be fixed or a destination to reach where all if good and no further change is necessary.
We are in participating in multiple disruptions playing into each other and this situation presents us with many opportunities for liberating decisions we can make.
This is part of what I will discuss next Wednesday.
I signed up for the free 12 week offer of digital access to The New York Times a few weeks ago. Last night, this offer arrived by email. 75% off home delivery for 12 weeks. They do not filter out people overseas – until you click on the link and it breaks.
The 75% off cover price is an amazing deal for the second step deal after 3 months free access as it includes home delivery. I can’t see how they make money from this with ad revenue down and distribution costs that cannot be cut further.
Pricing like this from any newspaper publisher, and there are plenty doing it, makes we think they are in a race to the bottom. Once they get there they will urgently need a completely different business model.
It’s terrific to see support for newsagents on social media from those behind the official Tour de France guide. This tweet was sent to to 37,300 followers and retweeted to others.
I love that they directly call our newsagents.
We ought to appreciate this support by actively promoting the title in our businesses.
The official Tour de France guide is a special interest title people will seek out. It’s an excellent opportunity for us.
It is good to see magazine distributor promoting magazine titles from Aussie publisher Artwear Publications on Twitter and pitching that these titles are available from newsagents:
I heard a customer gasp in the magazine aisle yesterday. I asked if everything was okay. I don’t want to read about death!, she said. She pointed at the magazine in the photo. It’s a die – for making cards, I said. They shouldn’t use the word die, she said. I’m old, was her last comment.
The exchange left me smiling. What is a promotion to some is a depressing reminder to others I guess.
Every day in the newsagency we encounter situations like this, situations that show another way our businesses are different in terms of our shopper interaction.
I noticed small size Puzzler titles discounted to $3 in a Newslink outlet in Melbourne yesterday. The offer is simple: $3 with any other magazine purchase. I suspect the publisher is funding this. If they funded it for me, offering full cover price margin, I’d pitch the promotion too. Unfortunately, publishers tend to not fund these promotions for newsagents.
Bauer Media increase supply of the Australian Women’s Weekly for a newsagent by 44% yesterday for no reason in sales history as data in the screenshot indicate. Even with the terrific Julia Morris cover story the increase is not justified.
This unwarranted oversupply is a waste of paper, labour, fuel and space. But Bauer would have known this. The oversupply makes a mockery of what they recently told the ACCC they want to do in relation to magazine supply.
7-Eleven outlets pitch up-sells well at the counter. No matter when you visit there are several offers. I have noticed recently in Victoria they are targeting Myki top-up shoppers. This week it is offering Extra gum with a Myki top-up or purchase. The $2 offer is good value.
There are several lessons from the 7-Eleven approach here: the offer has to be good value, targeted to the destination shopper and professionally pitched. Confectionery suppliers to the newsagency channel can make these offers. Sometimes all you need do is ask. Remember, though, a professional sign is vital.
Newsagent sales basket data indicates that transport ticket purchases are among the least efficient for newsagents with the destination traffic rarely extending the basket. 7-Eleven combats this with its approach to up-sell offers.
If ever you needed a reminder that Winter is DVD selling season, get to your local Coles supermarket. The photo is one display I saw yesterday when I was out in retail. Newsagents have access to low cost DVD titles from several suppliers. Check out their current deals as you could find a good package that lets you make money for what is a short but valuable season. Placed in the right location, you could attract new traffic.
The Coles approach is terrific – an easy to shop display with understandable price points.
DVDs are an opportunity right now.
While for sure there is a debate about the Newsagency shingle, for the majority of newsagency businesses it remains the key identifier of the business. This is why it is frustrating to see a display like this outside a newsagency.
In my opinion this display damages the business and the broader newsagency brand.
I don’t care if the magazines were forgotten in the returns process and the newsagent is seeking to mitigate the situation. It looks cheap. It looks bad.
As for selling the freebies that come with magazines, this is a foolish and brand damaging act.
We ought to expect better from our colleagues with whom we share a shingle.
The ACCC has witten to interested parties advising the decision to approve the MPA application for authorisation to conduct a pilot program. Click here for the Determination by the ACCC.
The ACCC decision is despite:
The majority of post-draft determination submissions were received from newsagents opposing authorisation of the pilot.
The role of the ANF is documented in the determination including at point 21 (page 5) their strong support for the MPA application and then at point 27:
27. The ANF provided a submission maintaining its support for the pilot and responding to issues raised by newsagents. Another from a provider of point of sale software opposed the arrangements.
The ACCC in the determination makes a number of comments I may comment on here at a later time as I disagree with their thinking.
The reality is – the result is what it is. We all move on. I remain committed to pursuing fair and equitable magazine supply for newsagents.
It’s been put to me that several newsagents have been given free membership with Newspower. One reportedly received a year for free while another three months. If true, this would be of interest to all Newspower members as the savings to them would be considerable. The reports I have heard relate only to Newspower businesses in Victoria.
Newspower is owned by the industry associations and GNS.
Here is magazine sell through rate data at the MPA category level for Network Services titles supplied to a newsagency.
Click on the image for a larger version.
Ignore the last column as the month was not complete when the report run. The eleven months prior offer damning evidence for some title categories.
A consistent sell through rate of 50% is necessary for break even in the newsagency from which I have this data. They are losing money in more than half the categories from Network Services.
It is data like this a newsagent could use as cornerstone evidence supporting a claim of unfair behaviour by a magazine distributor.
To magazine publishers I would say – here is the data newsagents have. Plus they have it down to the title level. I have not published that here as it would surely upset some publishers. It disgusts me to see a title consistently selling at 22% each month or less for every month of the year.
This is what is causing newsagents to reduce floorspace allocation of magazines. It is not a new situation.
Here is the full text of a letter I sent on newsXpress letterhead yesterday to the ACCC in relation to the MPA Pilot program that tests proposed new magazine supply rules. I am sharing it here to keen all newsagents informed.
In Annexure C of the submission by the Association of Magazine Publishers Australia Inc. (MPA), the MPA claims newsagents have become increasingly disengaged with the magazine sector (point 7). They say this has occurred because of labour costs, freight costs and cash flow issues (point 6).
The MPA proposes a three-pillar solution at point 8 of Annexure C: a Code of Conduct, Channel Engagement (educating of newsagents to revive interest in magazines) and Retail Skills (training newsagents on how to manage magazines efficiently).
It is our view that the goals set by the MPA could be achieved if newsagents are supplied on the basis of what will reasonably sell in their businesses. We do not see a need for training or education. Indeed, newsagents themselves have demonstrated how much they value magazines by engaging in matters related to this point by the MPA and not quitting the category altogether.
To demonstrate that a trial is not needed, newsXpress sought from its members magazine sell through data from the last year. We provide this data to the ACCC today under cover of this letter. Each report is for one business and details the sell through rate percentage by distributor and magazine category. Some provide data at the magazine title level.
In the reports from a selection of businesses for which we have received sell through rate data you can see situations of gross oversupply over the long term. This is the sole reason newsagents have become increasingly disengaged with the magazine sector. Fix this and you fix the problem.
In the reports you can see the extent of product wastage. Newsagents carry the major cost of this in terms of space, labour, freight and opportunity cost. They have no mechanism for reducing any of these costs as they have no control over supply.
The MPA has the capacity to address this oversupply issue among publishers, indeed among their own membership. While the MPA has been prosecuting the case for ACCC approval of its Pilot program, some of its members have knowingly engaged in oversupply not supported by the sales data evidence provided by newsagents. Again, fix this and you fix the problem.
The package of data provided with this letter demonstrates just some of the evidence of oversupply of magazines that newsagents have on their computer systems. This is evidence that has been offered to the Australian Newsagents’ Federation in the past in support of making a case for fair and equitable supply of magazines.
This sell through rate data is also available to the magazine distributors and publishers.
For the record we note that the sell through rate is the percentage of copies of magazines unsold by the end of the on-sale period. The sell through data is isolated to individual issues. For example, a sell through rate of 30% for Food magazines for, say, June 2014, would be the result of supply for the June issue less returns for the June issue when it came off sale.
We hope the data piques the interest of the ACCC in this matter and that it asks why it is that small business newsagents are supplied some magazine titles at a level to drive a continuously uneconomic sell through rate.
The MPA says the ACCC should not open its consideration of this matter to be broader, into a consideration of supply to newsagents versus other retailers. We say consideration of such matters is invited through the MPA description of the supply model to newsagents. That this model is quite different to the model for newsagent competitors is a key factor in the efficiency of magazines for newsagents. It sits at the heart of our ability to be competitive with magazines. Any change maintains terms for us that hinder our ability to compete ought to be considered as having little public benefit.
newsXpress would welcome an opportunity to further explore the data provided and the points canvassed in this letter should the ACCC be open to such.
The letter will be on the public register of the ACCC. Due to confidentiality requirements, the comprehensive magazine sell through rate data will not be put on the public register.
We seized the opportunity to stock the ugly dolls at a terrific discount. We pitched the product in a dead spot with a cheap display. The sign was the key factor in us selling out of these dolls in less than two weeks.
I have a few takeaways: end of run items provide opportunities for us to push back on the expectation we are expensive. Keenly priced products at ideal impulse purchase locations with almost offensive cut-through signs work.
We used hand written price tags for ink through a recent sale and it worked. The hand written signs pitched a local approach to pricing. Pricing mattered as external marketing did not list prices. It was down to the in-store pitch to drive the purchase.
As more than 1,000 newsagents use Tyro for Eftpos processing, I encourage you to look at the campaign being run by Tyro to lobby the Reserve bank to act on interchange fees. There is a quick survey you can take in support of the campaign. here is the heart of their pitch:
Interchange fees on credit and debit transactions are up to 10 times higher for SMEs then they are for big retailers. It’s just not fair.
Without interchange fees, Tyro estimates Australian businesses would be better off by around $300 million annually. That could mean thousands of dollars in savings back to your business each year, plus a more level playing field for the engine of Australia’s economy.
I support the Tyro campaign.
Ever since I and other newsagents started speaking about the poor representation of newsagents by the ANF on the proposed magazine supply rule change trial being organised by the MPA, representatives of the ANF have attacked some speaking out but refuses to engage in real dialogue.
There was Ann Nugent, QLD ANF staffer, reportedly speaking out about me at a public meeting, ANF Chair Stuart Kilborn on the phone to a newsagent he’d never spoken to complaining, ANF CEO Alf Maccioni responding to newsagents putting down those challenging the ANF approach and the ANF SA rep, Colin Shipton out in SA reportedly putting down any who disagree with the ANF.
While the ANF is entitled to say what it likes, this approach of attacking those questioning its strategy and then ducking for cover and not engaging reminds me of a propaganda film used in the US in the 1950s: Duck and Cover.
I proposed a debate with the ANF CEO so that newsagents could judge for themselves. Refusing this opportunity of transparency damages the ANF and opens for question among newsagents why it is not open to publicly talking about its policy position, a position it established without consultation of those it claims to represent.
The suggested debate (or discussion if you prefer as I don’t see it as adversarial) offers the ANF an excellent opportunity from which to show newsagents their approach is right, it shows them not ducking for cover.
With the latest series at an end, now is the time to leverage Game of Thrones merchandise. Anything with Jon Snow is especially popular. If you are asking what is game of Thrones you are too late. If you are asking which suppliers have product you are probably already too late. For these pop culture items buying needs to be ahead of the wave for you to maximise the opportunity. This is a space not occupied by traditional newsagency suppliers.
I have been trying out the Tatts mobile and online facilities to understand how they operate and compare the experience to the usual in-store experience.
Regulars here will know that I think online represents a far greater risk to newsagent lottery traffic and revenue than supermarkets yet newsagent associations have focused their attention primarily on the risk of supermarkets.
My experience with the Tatts App and their website has been terrific. It saves time and offers services someone short on time would like. I approached it with the mindset of a consumer: an irregular purchaser who is short of time and can easily forget to check tickets. The App and / or website experiences address each of these needs based on what I have experienced.
Purchasing a ticket on the App takes seconds. You are notified of the win and payment is made before most shops are open. The auto generated email announcing the win is good – cheerful, brief and to the point.
While there is a limit to what I can purchase on the App, the way around that is to setup a favourite ticket on the website, like, for example, a System 10, and the Applets you select the favourite.
You can’t use the App from overseas. To make these purchases you’d need to use the website accessed through a VPN that looks to Tatts like you are in Australia.
If I was a Tatts shareholder I’d be thrilled with what Tatts is doing online as it is important for the future of the business. It reflects the way services purchases are moving.
If I was a Tatts retailer I’d be concerned at the regulations Tatts imposes that drive the cost of providing the service up. I’d prefer the costs to be falling and the only way to achieve this is with less regulation on retail space allocation, corporate image and training requirements.
I encourage newsagents to try online as I have, go and eyeball your toughest competitor.
Further to my post about the eye catching sale being run at EB Games at Knox, check out the equally eye catching sale I saw at their Queen Street Auckland store yesterday. The two photos speak to the terrific consistency of execution by EB Games outlets.
This is the way to leverage your retail brand.
The newsagent who sent me this evidence of oversupply of Wheels magazine must be wondering if this is payback for some offence as there is no logic behind Bauer Media’s decision to double supply of Wheels magazine. There is no evidence in the data either. Look at April, Bauer bumped supply from 4 to 8 even though at 4 they were not selling out. The newsagent feels helpless. They also feel their work in ensuring accurate sales data is wasted.
Bauer is the driving force behind the MPA supply rule change trial, a trial with a rule of no early returns.
Bauer Media does not need any trial to sort out its own systemic oversupply to small business newsagents. No, all it needs to do is change its practices.
Check out the supply of Bauer Media’s People magazine to a newsagent from this screenshot from their newsagency software. Supply adjustments with no apparent regard for the performance data for the title. The decisions by the allocations ‘experts’ at Bauer don’t make sense.