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

Author: Mark Fletcher

Advice on handling faulty product returns

A retail newsagent I know recently refused to give a customer a refund for what was clearly a faulty product. The item was one day old and found to be faulty immediately on removal from the retail packaging. The item was damaged and not working properly as a result. There was no obvious respect of repair.

The retailer said it was not their responsibility.

Australian consumer law is clear on this.

Replacements and refunds
You can ask for a replacement or refund if the problem with the product is major.

Replaced products must be of an identical type to the product originally supplied. Refunds should be the same amount you have already paid, provided in the same form as your original payment.

The business may take into account how much time has passed since you bought the product considering the following factors:

  • type of product
  • how a consumer is likely to use the product
  • the length of time for which it is reasonable for the product to be used
  • the amount of use it could reasonably be expected to tolerate before the failure becomes noticeable.

For a major problem with services you can cancel the contract and obtain a refund or seek compensation for the drop in value of your services provided compared to the price paid.

The retailer is responsible. Their refusal to refund for the faulty goods broke the law. Worse still, it got them a bad name.

I was approached because the customer was searching online how to complain about a newsagent, and they found this place. They have gone back to the newsagent. If the answer remains no there will be consumer affairs and ACCC complaints. Worse still, there will be a post on a local community Facebook page. That is where real damage can be done.

The customer is energised to act not so much because of the refusal of a refund but because of how they were treated. If their story is true, the handling of the request was rude as well as outside the law.

Make sure you and everyone working in your business understand your legal obligations.

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Ethics

Broadening the appeal of chocolate bars

Confectionery companies are renaming products to broaden the appeal. Heinz did it with ketchup, Coke with fizzy drink. Now we have Snickers renamed with hip words. It makes sense as it broadens the appeal of the product. That means people could purchase for a reason beyond the bar inside the wrapper. That is good for the manufacturer and good for the retailer.

I do wonder how far this trend will go.

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confectionary

GUN CONTROL: Why is this magazine sold in Australia?

Sure, we have had this magazine, GUNS & AMMO, and similar in Australia for years. In the wake of the Las Vegas terrorist attack it is timely to ask why do we have this magazine here? It primarily promotes guns that are illegal in our country and a culture that is foreign to most Australians. I guess we have it because it sells, unfortunately.

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magazines

Using Google AdWords to pitch to those looking for a competitor business

 

You can pay Google to have your company listed if people search for a competitor. In a real-life high-street situation, this is like putting a billboard up directly in front of a competitor business location, so that everyone heading for that business saw your billboard first.

This is a common form of online advertising. Google advertisers pay Google for each click on the ad.

Newsagency software company POS Solutions recently complained a competitor of theirs, Retail Express, was doing this to them.

This week POS Solutions has been doing it to my POS software company. This is a reasonable form of paid advertising allowed by Google.

Landing people on your business website naturally, without having to pay for the click, is the most valuable landing you can have. It is free and the click to the page is purposeful as it was a sought-after destination.

The best way to achieve this, to land the people you want on your web page is to have fresh and valuable content. Google has smart algorithms for assessing this. Their determination shows in the natural search results, those listed after the Google ads, the entries that say AD. AD means the position has been paid for, the positioning is not a natural result based on content.

I do not use Google AdWords for any of my businesses. Rather, my focus has been and continues to be to ensure fresh, relevant, trusted and enjoyable content on each website with which I am connected. The high Google ranking of each of the websites, more than twenty in number, reflects the value focussing on these points: fresh, relevant, trusted and enjoyable content really does matter, to Google and to people searching online.

If your site is not ranked in Google search results where you want it, work on the site before you start spending money with Google to get it placed ahead of competitors. By work on the site, I mean: ensure fresh content, on-point meta data, regular SEO work and more to ensure Google sees your site as offering value to the Google ecosystem. Paying for ranking is an option but searchers do see this as an ad and not as a natural result.

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Management tip

The changing role of newsagency software

There was a time when newsagents chose software based on the services it provided in the agency space – magazine invoicing and returns, newspaper run lists, newspaper home delivery account management, sub agent management.

While handling these things are sought today, they are not considered as important as they once were. In my experience, newsagents today consider other newsagency software capabilities to be more valuable. Here are some:

  1. New traffic supplier EDI links for electronic catalogues and links in categories like toys, homewares, fashion and more. More data is being shared that facilitates more valuable supplier connections outside what was traditional. By new traffic supplier, I mean suppliers with products that broaden the demographic appeal of the business.
  2. Integrated (direct) buy now pay later options. This fundamentally changing LayBy.
  3. Direct e-commerce platform links to the world’s best for small business – Shopify, Magento, WooCommerce. There are newsagents adding $25,000 and more a year in revenue from shoppers they have never met and will never meet.
  4. Business intelligence platform link enabling performance analysis from any platform, anywhere.
  5. Retail brand-based e-commerce platform links.
  6. Tyro broadband EFTPOS link.
  7. Big four bank links through PC EFTPOS.
  8. Xero cloud based accounting link.
  9. Scale integration, for selling items by weight.
  10. Fuel dispensing integration.
  11. Online appointment scheduling.
  12. Integrated cloud backup.

The list speaks to the variety of businesses in this diversifying channel.

It is the various e-commerce platform links that are most sought after as they provide a place on the world stage for locally owned businesses.

These links and integrations are valuable for either improving business efficiency and / or enabling businesses to reach more shoppers. Most new integrations and links innovation add significant measurable value to newsagencies whereas with the old agency integrations there is little in the way of valuable innovation.

While magazine and newspaper management tools will play a role for years to come, suppliers in those spaces have let newsagents down by not facilitating sought-after innovation years ago. That ship has sailed and now, from a technical perspective, newsagents are looking at efficiencies and new traffic opportunities from other suppliers.

Looking at this as the owner of Tower Systems, which serves more than 1,700 newsagents with its newsagency software, innovation is coming more from outside what has been traditional for the newsagency channel. This is a good thing. It brings new suppliers to the table to challenge is and see new opportunities. The more this happens, the less relevant the out of date technology and associated business practices from old-school suppliers.

As our newsagency businesses change, so must the infrastructure on which we rely in our businesses every day.

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Newsagency management

When a newsagent decided to remove Tatts from their business

On analysing the return on investment, floor space and labour, a newsagent I was talking with recently has concluded that they will be better off without Tatts in their business.

They are yet to undertake the new corporate image and digital marketing fit out and therefore they have been running the numbers.

While their Tatts numbers are good, growth is average for any Tatts outlet.  It is not keeping in line with non-agency parts of their business where they are growing revenue by 15% with most this coming from high-margin products where year on year growth is even higher.

Looking at one of their growth categories, they have lifted revenue by $26,000 on the back of less than $3,000 additional inventory tory investment and with no additional space investment. The $26,000 in revenue represents $14,300 in gross profit. This is equal to more than $200,000 in lottery sales.

What is even more important is that the category example above is a new traffic generator, it bring in people who in the past have not traditionally shopped in the business. Lotteries, on the other hand, rely on traditional traffic.

So, the question for the retailer is do they cut ties with Tatts? It is a business-specific and tough question as the raw numbers are confronting. For this business, do they really want to turn off what is certain revenue and take more of a risk in the business? Recent results indicate that they can safely back themselves.

As they thought about a business without lotteries they started to see greater potential.

For example, the most valuable retail space in the shop would be freed up to be 100% under their control. Sketching that out from a street front perspective they started to see a very different business to what shoppers see today with lottery collateral dominating the image of the business.

This led to the contemplation of what would our business be? This is a good question. Even thinking about it can be liberating in terms of what could be if you had complete control.

The decision is not yet 100% locked in. They have several months yet before they must lock it in. However, they say they are set. I am writing about this today in part to give them a way to gather other opinions.

Let them know what you think in comments here.

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Lotteries

No upside in over the counter bill payment

I do not see any upside in over the counter bill payment for newsagents.

With online widely available and becoming more secure, the barriers to online payment are reducing.

Suppliers, too, are embracing online, offering rewards for paperless (online) transactions.

Banks and suppliers, too, are making scheduled payments easier and this helps with family budgeting.

A study from 2011 by the RBA provides the most recent insight into this area of online bill payment.

While these are important, the other factor for counter (OTC) bill payment is the demographic. OTC bill payment customers are likely to be older. This means a higher time cost to process, more complaints and less likelihood of add-on purchase. These three points are based on anecdotal evidence from recent years.

If we go back to the time of Bill Express, the OTC bill payment service on which newsagents lost tens of millions of dollars, shopping basket data from that time revealed 80% of bill payment transactions were bill payment and nothing else. So, there is an efficiency question for retailers – efficiency not only at the counter but in terms of space used in-store to pro one the service.

Another consideration is the growth opportunity. Will OTC bill payment grow? Unlikely. There are many other upside opportunities available to newsagents.

For me, though, the biggest factor in the consideration of OTC bill payment is that it is agency business, business for which the retailer receives a small fee that is unlikely to reflect the true cost of providing the service and that in providing the service higher margin opportunities are interrupted or stopped. It is not good business in my view, it does not fit with my  business model.

Once I define myself as a retailer, decisions about agency lines is clearer.

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Newsagency management

Someone forgot to change the cover price of The Age

Fairfax announced the cover price of The Age would increase to $3.00 from today. Here is today’s front cover, showing the price still at $2.80. The circulation folks at Fairfax are in for a busy day and the folks responsible for production are likely to have a worse day … unless they delayed the increase because of Richmond’s historic win.

That the old price is still showing on the online edition indicates they are yet to realise.

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Newspapers

Newsagency management advice: challenge a prospective employee on a trial shift

Giving a prospecting employee a trial shift is a good way to assess their value to the business. Too often, however, trial shifts are not structured to challenge the candidate. My advice today is that you structure a trial shift, always make it the same, so you can reasonable access the value of the candidate.

Here some tasks you could set for any candidate during a trial shift:

  1. Create a basic product display. Clear space, give them the products in a box. Explain what you are looking for in terms of outcome. Get them to do the display. be sure to leans some tricks in the box. For example, a damaged product, products without pricing, signage that has nothing to do with the display.
  2. Vacuum. Show them the vacuum cleaner and ask them to vacuum the floor. Their attention to detail will be telling.
  3. Their observation. At the end of the shift ask them to list the top three things they think should be changed in the business. Their response will demonstrate their observation skills as well as their preparedness to actively contribute.
  4. Mystery shop. Have someone they don’t know shop with them and throw up some challenges. This mystery shopper should assess the experience.
  5. Serving. At a busy time at the counter, leave them alone for a moment to see how they react.

A well structured trial shift is a terrific way to access the suitability of a candidate. The key is to have a process you follow each time, to know the criteria you will use to assess their suitability.

Footnote: always pay candidates for trial shifts. See what FairWork has to say.

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Management tip

Newsagency marketing tip: bring warmth to your shop layout

Best practice in retail layout and fixtures today is to no longer use traditional built-for-purpose fixtures. The more everyday warm furnishings you use the better, with different colours, shapes, sizes and textures. Real life used is even better. Sorry traditional shopfitters.

No longer does everything you use to display and hold product need to look the same or connected.

Here is a good example from a leading US fashion and homewares store I saw recently. Their use of the cupboard is exactly what I am talking about.

Click on the image for a larger version.

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marketing

An excellent example of terrific visual merchandising

Here are four photos showing terrific attention to detail in a small Halloween themed display in a bookshop I visited earlier this week.

Not only is the display eye-catching, it makes excellent use of a small amount of space and it pit shed products from a range of different categories. In fact, I count six different product categories represented.

This is a smart display, especially for the space it takes. Rather than the old-school big and bold aisle end display newsagents bare still encourage to create, here is a small format display in a tight space. It is a display that represents ts a narrative and this is another reason I think it is smart.

I hope you find it as inspiring as I do.

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Newsagency management

Good looking magazine and newspaper display

I like this wall I saw earlier this week displaying magazines and newspapers together. I like it for the professional look, ease of browsing, how it makes the products the hero that the fixtures are flexible, that it works on any wall to attract shoppers to this location, and the pitching of papers and magazines together.

The placement of small-format titles between papers is smart.

The black fixture makes the magazine covers pop.

I could see a wall like this on the back wall of a newsagency working better than the old style a-frame magazine units that still occupy centre stage of some newsagencies.

Sure, the wall cannot hold as many titles, but with thoughtful placement, a wall four metres wide could work.

While magazines are challenged, they continue to be an important traffic driver for many newsagency businesses. As such, it is important newsagents continue to evolve how the category is ranged and pitched in-store.

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magazines

Selling pens, markers, with optimism

I love this  display I saw at an Office Depot store. The WRITE BRIGHTER headline is brilliant and the range it is promoting fantastic. It is a strong, optimistic, pitch that makes you want to buy, to write brighter. We can learn from this. Our pen and marker suppliers can learn from this. Would I put this display in my shop? For sure! … because it changes the conversation, it pitches pens and markers as an impulse purchase opportunity.

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Newsagency management

Confronting the challenge, making it work

Challenges can stop us or they can motivate to tunnel through, climb over, walk around or somehow overcome. I was inspired by the table out the front of a bookshop I visited yesterday. They are on a steep hill but wanted a table of books out the front of their shop. They made it work.

They overcame the challenge and made it work.

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Newsagency management

Pitching happiness from the shelves

More and more retailers, usually small business or independent retailers, are taking the approach of a curator in selecting items they stock and the in-store placement of these items.

Being a curator is a step beyond being a retailer as you choose items for how they make people feel, and sometimes this is consideration ahead of thinking about sales revenue from the item itself.

In making conscious decisions to stock and display in order to impact the mood and outlook of our customers, we can attract new traffic and drive engagement in-store.

This HAPPINESS PLANNER is a good example. Who doesn’t want to plan for happiness?

There are some excellent suppliers who play well in this space, who have on-trend items we can use to make pitches similar to this one. Retailers need to find their own, with ranges that speak to them. This is what being a curator is about.

In my shops we do it regularly in-store as well and on social media. Customers love it. we love it because of the outlook it projects.

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Newsagency management

Small Sydney gift fair works well

The Retail Quarter, the gift fair in Sydney right now, has been a good fair. I have been there over the weekend. While it was not crazy busy and does not have a large number of suppliers, it is proving to be a good event.

I like that the aisles are not as packed with people. This allows more quality time networking and with exhibitors. That alone improves the business experience of attendees and exhibitors.

The greater homewares focus was something I appreciated.

Looking at the fair as a retailer, I found plenty to buy, and I enjoyed that.

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Gifts

Nothing like AFL Grand Final week to drive newspaper sales

That Richmond is in the AFL Grand Final this coming Saturday is appreciated by all newspaper retailers in Victoria as it is delivering a welcome boost in sales.

Victorians love their AFL football, especially if Victorian teams are in the Grand Final.

Had this been a Greater Western Sydney / Adelaide Crows Grand Final newspaper sales would almost certainly have been down. But it is not, and that is good.

That it is Richmond makes it even better value for us because of their battler status. They are not a rich or strong club like Collingwood, Carlton, Geelong or Hawthorn. Richmond is a local suburban club with roots back to the 1880s. That is at the root of the passion.

Engaged newspaper retailers are supporting Richmond this week to make the most of the supporter opportunity. This is a no-brainer. Posters, colours and other things in-store show an engagement that almost all Victorians will appreciate.

News Corp. is leveraging the opportunity well for newsagents:

6 likes
newsagency marketing
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