Newsagency of the future


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Presentation by Mark Fletcher to Australian Newsagents' Federation conference, May 2008, Gold Coast, Australia.

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Newsagency of the future

  1. 1. What do we stand for?
  2. 2. Building the newsagency of the future… Becoming an entrepreneurial newsagent.
  3. 3. The professor <ul><li>&quot;The Roman Empire that was mass media is breaking up, and we are entering an almost-feudal period where there will be many more centers of power and influence,&quot; … &quot;It's a kind of disaggregation of the molecular structure of the media.&quot; </li></ul><ul><li>Orville Schell </li></ul><ul><li>dean of the University of California at Berkeley's journalism school. </li></ul><ul><li>Business Week, Jan. 17, 2005 </li></ul>Orville Schell (photo Jane Scherr)
  4. 4. The publisher stirs <ul><li>&quot;Within our lifetimes, the distribution of news and information is going to shift to broadband,&quot; Sulzberger says. &quot;We must enter the broadband world having mastered the three key skill sets -- print, Internet, and video -- because that's what's going to ensure the future of this news organization in the years ahead.&quot; </li></ul><ul><ul><li>Business Week, Jan. 17, 2005 </li></ul></ul>
  5. 5. The epiphany <ul><li>“… as an industry, many of us have been remarkably, unaccountably complacent. Certainly, I didn’t do as much as I should have after all the excitement of the late 1990’s. I suspect many of you in this room did the same, quietly hoping that this thing called the digital revolution would just limp along.” </li></ul><ul><ul><li>ASNE, April 13, 2005 </li></ul></ul>
  6. 6. What do we stand for?
  7. 7. Seeing the future <ul><li>“ So, media becomes like fast food – people will consume it on the go, watching news, sport  and film clips as they travel to and from work on  mobiles or handheld wireless devices like Sony’s PSP, or others already in test by our Satellite companies..” </li></ul><ul><ul><li>Worshipful Company of </li></ul></ul><ul><ul><li>Stationers And Newspaper Makers, March 2006 </li></ul></ul>
  8. 11. Who needs magazines? When you can have a conversation For every 1 magazine, more than 100 blogs
  9. 28. New newspapers?
  10. 35. Source: Dr Piet Bakker, March 2008
  11. 39. Books
  12. 42. Social media
  13. 43. Old media versus social media
  14. 47. Old media <ul><li>Economic barrier to entry.  </li></ul><ul><li>Regulated. </li></ul><ul><li>Geographic limitations. </li></ul><ul><li>Communications usually one way.  </li></ul><ul><li>Providers have control consumer sees or hears. </li></ul><ul><li>Presentation is more important than content.  </li></ul><ul><li>Distribution is the barrier. </li></ul>
  15. 48. New media <ul><li>No economic barrier to entry. </li></ul><ul><li>Little or no regulation. </li></ul><ul><li>No geographic limitation. </li></ul><ul><li>Communication is two way. </li></ul><ul><li>Providers cannot control what consumers hear/read. </li></ul><ul><li>Content is king. </li></ul><ul><li>No distribution barrier to entry. </li></ul>
  16. 49. Greeting cards
  17. 51. 123 Greetings, FREE <ul><li> </li></ul><ul><li>20,000 free ecards </li></ul><ul><li>3,000 everyday, special occasions and events </li></ul><ul><li>See what cards other people in their network have sent </li></ul><ul><li>Review the highest ranked cards by MySpace users </li></ul><ul><li>No limit on cards sent </li></ul>
  18. 52. Electronic Vouchers, Recharge
  19. 53. Australia Mobile Telephony Market Summary (Direct Market) AU$2 billion Face Value Market – Generating Potential of $40M Net Revenues
  20. 54. A mistake we cannot repeat
  21. 55. Getting the business strategy right Mobile Operators Must Rely Only On Sound Business Models For Stable Distribution Successful Long Term Models Unsustainable Models <ul><li>Success factors for newsagents: </li></ul><ul><li>Cleaner supply chain </li></ul><ul><li>Better customer service </li></ul>   Sell anywhere Sell more Less theft
  22. 56. Smart recharge selling Passive vs. Active Recharge POS enabled: prompts on point of sale screen, prompts on receipts Intelligent up-sell based on purchase, actively offering up-sell deals Integrated to whole of business! Easier selling from greater enjoyment by retail staff .. POS Counter intuitive Less counter disruption, less wait time Up sell prompts during the sale – i.e. a gift card purchase Turning the mobile carrier / retailer relationship into a partnership.
  23. 57. Other categories
  24. 62. What do we stand for?
  25. 63. News from the last seven days
  26. 71. “ Yes, print is a burden. It’s expensive to produce for it. It’s expensive to manufacture. It’s expensive to deliver. It limits your space. It limits your timing. It’s stale when it’s fresh. It is one-size-fits-all and can’t be adapted to the needs of each user. It comes with no ability to click for more. It has no search. It can’t be forwarded. It has no archive. It kills trees. It uses energy. It usually brings unions. And you really should recycle it. Wow, when you think about it, print sucks. Jeff Jarvis, BuzzMachine
  27. 78. What do we stand for?
  28. 79. Where are we at today Here’s what we know…
  29. 80. March 2008 benchmark project <ul><li>89 newsagencies </li></ul><ul><li>60% suburban, 40% rural / regional </li></ul><ul><li>30% shop. centre, 45% high street, 25% rural </li></ul><ul><li>June 07 - January 08 : June 06 - January 07 </li></ul><ul><li>All stores compliant </li></ul><ul><li>Home delivery and sub agents not included </li></ul>
  30. 81. Benchmark: Newspapers <ul><li>City unit sales: 4.8% </li></ul><ul><li>City revenue: 3.5% </li></ul><ul><li>Rural unit sales: 3.1% </li></ul><ul><li>Rural revenue: 3% </li></ul><ul><li>Notes: Major dailies impacted the most </li></ul>
  31. 82. Benchmark: Magazines <ul><li>City unit sales: 7.5% </li></ul><ul><li>City revenue: 3.2% </li></ul><ul><li>Rural unit sales: 1.2% </li></ul><ul><li>Rural revenue: 3.1% </li></ul><ul><li>Notes: Buying & Selling; Teen; Motoring and Computing all in trouble. </li></ul>
  32. 83. Benchmark: Stationery <ul><li>City unit sales: 9.6% </li></ul><ul><li>City revenue: 6.3% </li></ul><ul><li>Rural unit sales: 0% </li></ul><ul><li>Rural revenue: 5.2% </li></ul><ul><li>Notes: Huge difference between newsagencies on this. </li></ul><ul><li>Technology products as high as 30% of overall. </li></ul>
  33. 84. Benchmark: Greeting Cards <ul><li>City unit sales: 3.9% </li></ul><ul><li>City revenue: 5.1% </li></ul><ul><li>Rural unit sales: 4.8% </li></ul><ul><li>Rural revenue: 5.1% </li></ul><ul><li>Note: Greeting Cards is the hero department of the benchmark study </li></ul>
  34. 85. Benchmark: growth areas <ul><li>Gifts: especially those associated with card giving occasions </li></ul><ul><li>Social stationery: travel journals, writing sets, invitation papers </li></ul><ul><li>Services: printing, Internet access, photo processing </li></ul><ul><li>more… </li></ul>
  35. 86. Benchmark: growth areas <ul><li>Art supplies: Location exclusivity, hero brands, habit based </li></ul><ul><li>Coffee: High margin, improves shopper comfort, habit based </li></ul><ul><li>Ink and Toner: Realigns value proposition, hero brands, habit based </li></ul>
  36. 87. Benchmark: problem areas <ul><li>Bill payment (beyond Bill Express): congestion, return, complexity </li></ul><ul><li>Newspaper Home delivery: 50% losing money </li></ul><ul><li>Copying: inefficient, poor return, high costs </li></ul>
  37. 88. The newsagents of the future will be entrepreneurial They will stand for something
  38. 89. Being entrepreneurial: inside
  39. 90. Being entrepreneurial: inside
  40. 91. Being entrepreneurial: outside <ul><li>Invitations </li></ul><ul><li>Haberdashery </li></ul><ul><li>Online ink </li></ul><ul><li>Online stationery </li></ul><ul><li>Gifts </li></ul><ul><li>New products </li></ul><ul><li>New experiences </li></ul>
  41. 92. Lessons from the past <ul><li>Music shops </li></ul><ul><li>Fish and Chip shops </li></ul><ul><li>Milk Bars / Convenience </li></ul><ul><li>Bookshops </li></ul><ul><li>Stationery shops </li></ul>
  42. 93. The how to find your future <ul><li>Spend more time outside you’re the channel </li></ul><ul><ul><li>Visit competitors and other retailers </li></ul></ul><ul><ul><li>Research online, research retail </li></ul></ul><ul><ul><li>Visit non newsagent trade shows </li></ul></ul><ul><li>Hire from outside the channel </li></ul><ul><li>Stop relying on suppliers for your business plan </li></ul><ul><li>Engage a business angel </li></ul><ul><li>Spend less time at newsagent dinners </li></ul>
  43. 94. More how to … <ul><li>Stop busy work on out of date processes </li></ul><ul><li>Stop sales reps visiting your shop </li></ul><ul><li>Buy from suppliers newsagents don’t use </li></ul><ul><li>Use your technology </li></ul><ul><li>Embrace deregulation </li></ul><ul><li>Change your mindset </li></ul><ul><li>Change your business </li></ul>
  44. 95. What do we stand for?
  45. 96. Hard decisions about our future <ul><li>Network wide: </li></ul><ul><ul><li>Forget about territories </li></ul></ul><ul><ul><li>Resolve the exit and entry conflict </li></ul></ul><ul><ul><li>Drop the newsagency shingle </li></ul></ul><ul><ul><li>Improve supply chain efficiency for us </li></ul></ul><ul><li>Store level: </li></ul><ul><ul><li>Allocate space based on financial return </li></ul></ul><ul><ul><li>Quit declining products before they hurt </li></ul></ul><ul><ul><li>Adding categories which fit your demographic </li></ul></ul><ul><ul><li>Get serious about business </li></ul></ul>
  46. 97. What we need from existing suppliers <ul><li>Magazines: Pay on scan based sales </li></ul><ul><li>Greeting cards: Agreed pocket based KPIs </li></ul><ul><li>Stationery: Buying 20%+ better than today </li></ul><ul><li>Newspapers: Reward based on success </li></ul><ul><li>Home delivery: Open pricing of our services </li></ul><ul><li>Retail: Put a price on our real-estate </li></ul><ul><li>Vouchers: Transparent and competitive pricing </li></ul><ul><li>Our network is a valuable asset </li></ul>
  47. 98. The epiphany <ul><li>“… as an industry, many of us have been remarkably, unaccountably complacent. Certainly, I didn’t do as much as I should have after all the excitement of the late 1990’s. I suspect many of you in this room did the same, quietly hoping that this thing called the digital revolution would just limp along.” </li></ul><ul><ul><li>ASNE, April 13, 2005 </li></ul></ul>
  48. 99. Our future is up to us We begin by quitting as victims, process workers, lemmings and sign up as entrepreneurs, willing and happy entrepreneurs.
  49. 101. We begin building the future by forgetting the past We begin by quitting as process workers and signing up as entrepreneurs, willing and happy entrepreneurs.
  50. 103. The Honey Pot strategy <ul><li>Track top sellers </li></ul><ul><ul><li>By ROI </li></ul></ul><ul><ul><li>By stock turn </li></ul></ul><ul><ul><li>By sell through rate </li></ul></ul><ul><ul><li>Times sold alone </li></ul></ul><ul><ul><li>What they sell with </li></ul></ul><ul><ul><li>Decay </li></ul></ul><ul><li>These are your Honey Pot products – around them you can grow </li></ul>
  51. 104. How often magazines are sold alone: basket data 40% 59% 48% Transport 60% 68% 75% Copying 56% 61% 68% Stationery 46% 51% 61% Tobacco 55% 61% 68% Lotteries 56% 61% 64% Cards 26% 37% 22% Partworks 49% 63% 58% Magazines 59% 73% 75% Newspapers Rural High St Centre  
  52. 105. Weekly title sales decay
  53. 106. Being entrepreneurial is a risk with the potential for excellent rewards Good data drives good decisions
  54. 107. Short term: the no data action plan <ul><li>Relay your magazines to MPA standards, adjust </li></ul><ul><li>Relay your stationery – touch everything </li></ul><ul><li>Stop busy work, find time in your day to work on your business </li></ul><ul><li>Walk out of your shop </li></ul><ul><li>Create a business plan </li></ul>
  55. 108. Are we process workers of business people? This is what it comes down to, it is what will separate newsagents from newsagents.
  56. 109. What do we stand for?
  57. 110. mag nation
  58. 111. Browns at Burnside, SA
  59. 112. Patterson Road News & Tatts
  60. 113. Sophie Randall
  61. 117. Cash flow research headlines <ul><li>Magazines cash-flow negative to $3 million a month in newsagencies. </li></ul><ul><li>Only 35% of magazines in newsagencies are cash-flow positive. </li></ul><ul><li>The top 50 magazines account for 40% of positive cash-flow from magazines. </li></ul><ul><li>The bottom 50 performing magazines account for 20% of negative cash-flow from magazines. </li></ul>