Newsagents wondering about the shift of classifieds from print to online ought to read the story by Michael Sainsbury on page 33 of yesterday’s Australian. It reports that Kerry Stokes’ Seven Network plans to offer free classifieds. Yahoo!7 has no major print investment at risk with a pitch for free online classifieds. Newsagents have missed an opportunity.
Here are three more photos from the new newsXpress Watergardens store which opened yesterday. The photos were taken by Graham Randall, one of the founders of newsXpress and a key partner in the store.
Our opening yesterday was without fanfare. Since this is the first corporate store we wanted to oopen and tweak a bit before we have a big bang opening. We are likely to time the loud launch with the opening of another greenfield location in Melbourne by a newsXpress member early in October.
I am a happy partner in the Watergardens business because it provides another newsagency in which I and my team at Tower Systems can experiment on ways to help our technology help newsagents boost sales, save time and increase profitability. Software companies often talk about these goals. It is my experience that it is when you use your software yourself behind the counter that you start to truly understand what is capable.
The same is true for newsXpress. The company itself owning and operating a newsagency provides us with personal experience learnings beyond member feedback.
Be sure to read the fine print of any marketing group agreement. Check out how ling you are locked in and the penalties for leaving the group. I saw one newsagency marketing group member agreement the other day with this clause:
For a period of one (1) year after expiry or termination of this Agreement the Franchisee undertakes not by itself or by its Directors or its Shareholders either directly or indirectly to join with or take membership of any group marketing/buying venture competitive with or similar to … provided that the Franchisee may conduct a newsagency business without restriction.
Okay, so the landlord requires the newsagent to be in a group. The newsagent joins XXX group. The newsagent decides, after a year or so, to move to another group and resigns. XXX requires the newsagent to sit out from any marketing group for a year. The newsagent cannot breach the lease requirement that they are in a marketing group and must stay with XXX. Catch-22.
The Orlando Sentinal demonstrates an amazing local connection with extraordinary (by Australian standards) online reporting of high school football including game by game previews. A check of Aussie newspaper websites and I cannot find such extensive local game coverage. As one who consumes most news online, the Sentinal model is excellent. As a newsagent, I’m happy that Australian publishers aren;t there yet.
I will be angry if instant scratch tickets are to be sold in supermarkets and convenience stores as appears may happen according to reports in the press today. It would be another example of government turning its back on small business.
We opened newsXpress Watergardens this morning – the first corporate store for the newsXpress group. I am one of three shareholders in newsXpress. The photos below show parts of the store and some of what we are trying to achieve in our own journey to the newsagency of the future.
Creating a business from scratch involves an extraordinary amount of work. In the case of Watergardens, Ben Kay has carried the bulk of this. It is rare that a business manager would work as hard and selflessly as Ben has over the last six months to make Watergardens a reality.
I like this display unit which was provided with the October issue of Better Homes and Gardens yesterday. It’s bring, frames the magazine and is, somewhat, disposable – we can put in a good position on the counter, use it for am month or two, and not have to manage it like we do the perspex units other publishers supply and sometimes mystery shop to check.
One way to drive impulse sales is through change and this counter display helps newsagents with such a change. The header card promoting the magazine around the TV show is an excellent idea as some may recognise them more than the magazine.
We’re putting this unit at our Tattersalls counter – I reckon BHG is one o those titles to sell well at the lottery counter.
On the actual display unit itself – I obviously failed Macrame 101 – others showed me how it was really meant to be put together.
We completed a relay of stationery at our Forest Hill store two weeks ago and while it is early days, we are seeing close to a 25% increase in sales on some days. As part of the relay we quit plenty of older stock and stock which represented brands we now wanted to carry and brought in new product – especially around the new brands. I expect the increase to settle at 40% long term once the makeover of stationery is complete.
The MPA drives newsagents to relay magazines in pursuit of sales growth. Why not stationery? If we can get such a kick from our small business – admittedly off a low base – then imagine what newsagents more successful in stationery could achieve. The kick has come without any promotional activity.
The project took two man weeks and a reasonable financial investment in new stock. The payback started almost immediately.
We are excited by the look of the new magazine display we are creating at a new store opening tomorrow. This fixturing is allowing us to full face more titles and half face the rest – far more than traditional newsagency fixturing.
I’ll have more to say about this new concept store in coming weeks but I wanted to post this photo today as a demonstration of breaking from the traditional fixturing which shopfitters drive newsagents to use.
I guess the proof will be in the sales, good or bad. But we felt it was important to experiment.
There is considerable disquiet among NSW newsagents about the apparent decision by NSW Lotteries, wholly owned by the Sate Government, to put some lottery products into the 7-eleven convenience stores. This move is certain to impact newsagent revenue and viability. For a Government which claims concern for small business, the Iemma Government in NSW appears to be quiet on this issue. Maybe it is money talking, who knows?
Newsagents have served in the lottery space for decades, providing convenient locations at a minimum cost to the government. now that they have well established the brand and built the traffic, the ever opportunistic US based 7-eleven corporate wants to shift profits from lottery retail offshore. Yes, My Iemma, that’s smart small business policy.
The image above is a clip from the latest Australia Post brochure which arrived in our PO box yesterday. If John Howard was as serious about small business as he claims to be, he would stop the 865 100% Government owned and protected Australia Post retail outlets from taking business from independent small businesses.
Australia Post used to be a Post Office. Under the stewardship Prime Minister Howard Australia Post has morphed its corporate stores into mini newsagencies – leveraging the lemming like conga line of customers into stationery sales.
The Government says Australia Post is operating within what is permitted under the Act. Since they control both houses of parliament they also control the Act. If they wanted to stop the retail network they own from taking sales from family run newsagencies then they could.
It all comes down to will and whether the commitment to small business is hot air.
The Post Office opposite my newsagency is Government owned. It competes aggressively in the ink and general stationery space.
I was disappointed to discover that the Herald and Weekly Times has introduced a charge of $1.50 for handling a newspaper backorder. That newsagents could offer the service for the cover price of the newspaper was a good customer service story from newsagents and the publisher. Now, with this charge, we take a step away from how things used to be. If the H&WT is charging why not newsagents? Maybe we should. I doubt we will. That a customer wants a backorder and you can get this for them reinforces the brand. This fee tarnishes the brand.
The Trading Post has the same retail space allocation as the Herald Sun newspaper in my newsagency. The gross profit it generates is only 3% of that of the Herald Sun. In a cash-flow sense, allowing for the cost of real-estate and labour, the Trading Post is a loss making title at least at Forest Hill, Victoria. Beyond the financial return is the efficiency.
With Trading Post sales continuing to fall, Sensis management must be considering how to respond. One option is to go completely free. The other is to shutdown the presses altogether and shift entirely online. I would not be surprised to see the Trading Post shift to a pure online model – given the tag line used in their logo.
Interesting to read an Editor& Publisher report of 12 media companies combining forces to launch a free online classified site in Colorado Springs. What is more interesting is that a newspaper, a TV station and 10 radio stations are behind the project. SoCoAds.com is a good site – simple to use and, best of all, free. The biggest media company backed free site in Australia is Cracker, the Fairfax site.
I have received six emails in the last week from people asking if I can help them source copies of the Art of Knitting and the John Wayne Collection. They emailed me as a last resort – each had been to two or more newsagents asking about backorders and had been told they were not available. They then searched online and got to this blog. Two have gone back to their local newsagent and four have refused because the service they received was so bad.
Newsagents used to be known for exceptional customer service. Except for a few small products categories, this is our only point of difference. One newsagent delivering poor customer service reflects on all newsagents.
If I can get partwork backordered then so can other newsagents. Sure they are a pain – the reward is a happy customer and someone who has their faith in the small business newsagent channel upheld.
As part of our focus on branded stationery items, we are giving preference to Marbig branded products. We like that they are not a one or two category company. We also like the quality of their product. There is no financial aspect to this decision – indeed I’d suspect that the folks at Marbig don’t even know since we are buying through a wholesaler and have had no direct contact with them.
Making a decision such as this around a brand brings clarity to other decisions in the stationery department.
Customers have been asking for the last week when our BrownTrout calendars will be out. That they have named the brand is surprising. This will be our third year playing in the calendar space and the first where we are not taking and calendars from the magazine distributors – having customers ask about the range so early is wonderful – we take it as a good sign. Our BrownTrout calendars were put out yesterday.
I sold a customer a sheet of carbon paper on Saturday. While those working in a newsagency would not be surprised by the sale, others would be. Why buys a single sheet of carbon paper? Someone our Forest Hill way obviously. Actually, the customer wondered aloud how mush longer she would be able to buy the single sheet. Her open wondering was more an acknowledgment of times changing.
The business person in me says we should not sell single sheets of carbon paper unless we have a price model which makes carrying and caring for the stock viable. In a social responsibility sense we must offer single sheets of carbon paper – it is our role as independent small business retailers to carry these traditions as long as we are able.
This is a challenge newsagents face: we compete in a tough and rapidly changing commercial world yet many of us want to respect traditions as demonstrating our point of difference. For now we will continue to stock and sell single sheets of carbon paper.
Bernard Zimmermann has published a long post on his POS Solutions blog tonight following my post earlier today. While most who read his post will see it for what it is, there is one point which goes to the heart of Mr Zimmermann and the company he created. He claims:
The last offer of any note for purchase of our respective businesses was from POS Solutions to buy Tower Systems, which we had a meeting to discuss.
This is a lie – there has been no such meeting. I made an unsolicited offer in writing to Zac Varga and Bernard Zimmermann – the owners of POS. After due consideration they rejected the offer as is their right.
My view is that POS Solutions is in trouble. This is a view I have formed based on steep discounting. I have seen quotes offering for under $5,000 what they usually charge over $20,000 for. Such discounting tells me they are in trouble. That and the number of newsagents who have switched.
To regular readers here – don’t worry. I am not about to let this valuable newsagent resource be hijacked by a fading competitor.
We misplaced the box of Daffodil Day fund raising product at our newsagency and forgot about promoting the cause. With our back room in upheaval for months because of construction plus so many charity requests put on newsagents we could make excuses but we know that the fault was ours. A weakness in our process allowed the box to go missing for weeks – we found it on the weekend. We have sent a cheque off for all the Daffodil Day product and taken it as a lesson to improve the back room processes.
I’d like to see some structure brought to charities using newsagents as fund raising points. There are some weeks we are raising money for two charities. This is not ideal.
We are planning to rein in the real-estate taken by magazine merchandisers in our newsagency. While we welcome their displays, now more than ever they are promoting titles away from their location. The result is visual noise which can detract from the category which owns the space.
Take a look at the photo I took on Saturday. It shows a great poster display promoting Elevator magazine and another promoting Home Beautiful. Elevator is promoted next to our astrology and markets sections while Home Beautiful is next to camping and crossword titles – both displays are a full aisle away from the titles being promoted.
We have allowed this situation to evolve over many years – what we have today, four of these merchandise displays, is our fault. At first, the displays were welcome because they covered otherwise blank space. Now, we’d prefer some quiet between the visual noise of magazine displays.
I don’t think this merchandising sells magazines. I’d like to see those investing in this merchandising met with newsagents to consider an investment more appropriate to today’s retail needs and which does drive sales. I’d certainly like to participate in such a discussion.
What I want is to sell more magazines. I think I can do this through smarter partnering with publishers and distributors – partnering which reflects today’s retail trends.
In his blog post, Coming to Newsstands Now: A New Look, at the New York Times website, David Dunlap writes about how a famous design firm is redesigning New York’s newsstands. While there is the inevitable debate around why – print is dead, having lived in New York for a year I’d note that it would be disappointing to lose the individuality of the current newsstands. I know that sounds like it contradicts what I have written here about Australian newsagencies, I’d note that there is a significant difference between newsstand and a newsagency – the latter is twenty five (or more) times the size.
While the Miniature Clock Collection partwork is not setting the world on fire in terms of sales, it does have a market. We have it displayed at the front of the newsagency and in our special interest area – it’s a challenge because we don’t have any other clock magazines. I like the title because it underscores our commitment to special interest titles.
If you are reading this blog post having searched the internet for sites about the Miniature Clock Collection – go to your local newsagent. They can get the title in and keep it aside for you. Good newsagents are magazine specialists.
Having been dumped by the E! TV channel, comedienne and red carpet queen Joan Rivers is creating her own outlet by embracing blogging. Her Emmys With Joan blog provides a lesson in rebuilding the supply chain.
By eliminating the wholesales, E!, Rivers is going direct. She promises that the new medium will be raunchier: I can finally get to say all the dirty and disgusting thoughts that those old-fashioned TV networks never let me get away with. The first blog post explains, in Rivers own unique style, what she is on about.
Whereas we had to watch E! or read magazines to get the Rivers take on the red carpet, now she has a direct line to the public. This is what new media is about – reducing the distance between the story, no matter how vacuuous, and the reader. It is a trend which ought to be of considerabl interest ot Australian newsagents.
For a laugh, read Joan’s blog. I think it’s very funny, but, hey, I am a fan.