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

Author: Mark Fletcher

The lottery challenge is bigger than Lottoland

While there is, finally, some action calling out Lottoland, there are newsagents who are not aware of other competitors, some of whom operate in the same way as Lottoland. Take a look at these competitors.

William Hill is like Lottoland.

News is yet to launch but is already getting plenty of attention in gaming circles.

Crownlotto, the name says it all.

Magpie Millions pitches as a community service, but it is a numbers based lottery. It operates under licence from the NT government.

And as a reminder, here is Lottoland:

What are you doing about this? All these lottery / betting products are chasing the customers on which retail, over the counter, lottery businesses rely.

While there has been some focus on Lottoland, their community contribution, the taxes paid and more, the challenge to newsagents and other lottery retailers is bigger than just Lottoland.

I have been aware of this suite of competitors for some time and have discussed them within my own circles when contemplating competitive strategy.

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Competition

The $2,370.00 transaction in the newsagency

What we can sell in our businesses, no matter whether we identify as a newsagency or a business that has transitioned from much of the tradition of that shingle, is limited only by our ability and imagination.

One newsagent had a single sale worth $2,370 Monday morning this week.

The same customer has since spent another $2,500 with the business.

The sales success is a testament to the business owners and their actions stepping outside hat has been usual for the channel, ensuring the business has the right products to facilitate sales this size and backing the products with the right in-store and out of store pitches to drive success.

This success on Monday is not isolated for this business. While the quantum a single sale is somewhat rare, single sales at above $1,000 are not.

This business is constructed for such success.

Buying, merchandise rising, marketing and shop floor engagement are all structured to achieve sales like this.

My experience is any newsagent has the capacity to achieve success like this.

To those who don’t believe the story – that’s okay, I don’t need you to believe it.

To those who think they can; pt achieve this – I say believe in yourself, team with those who can support you to achieve there.

To those who want to talk this down – go somewhere else to make people feel down like you.

This is a good story, to celebrate. A business identifying as a newsagency did this. It shows what is possible and for that we should celebrate.

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Newsagency management

GNS statement to shareholders

GNS yesterday issued a statement to shareholders:

Dear Shareholder,

I just wanted to report on progress at GNS.

As you know without Cash & Carry, our warehouse needs are considerably reduced. Recognising that we have just sold our Melbourne warehouse (10,000 sqm) and will be moving to a new modern facility (of 3,900 sqm). Similarly, we will be moving out of our Sydney warehouse at Padstow to a smaller modern warehouse with the timing yet to be finalised.

The 16/17 year just finished was – as you are aware – a very tough year. While we were still in profit we had to sell Padstow and refinance the business. Our service levels have now been restored and our inventory is now under much tighter control. As part of the more disciplined approach to stock levels we have had to recognise overstocking and took a $2m stock writedown. Unfortunately this resulted in a drop in share price, such price will be finalised shortly as our auditors complete their work.

As the start of rewarding our patient shareholders we have declared a dividend – GNS’ first – of 9% of paid up capital. The record date for payment is 2 December 2017.

Also from time to time, customers have requested access to their levies and we have been endeavouring to find a way without endangering the company’s cashflow and working capital needs. So in the next two months, provided ASIC clears it, an offer will go levyholders to take up half their levy in GNS shares and the other half as trading credit.

Last year GNS made two acquisitions – WA Stationers and V Wholesale and we continue to consider market opportunities to build a greater resilience for the business.

Our new senior management team has settled in well, recognising the changes that were needed and implementing solutions. It has also signalled a return to state based management and customer focus.

And to cap off a period of very considerable change, we will be presenting a number of Constitutional changes to shareholders at our 2017 Annual General Meeting. These changes being recommended will be detailed in the AGM papers but aim to recognise the changed market environment, freeing up outdated ownership restrictions.

Thank you for your patience and loyalty as we reassert our place in the market.

Yours faithfully,

Martin Hartcher
Chairman
GNS Ltd

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Newsagency management

newsXpress seeks out new shoppers with unique t-shirt product

Newsagency marketing group newsXpress last week launched Chalk-Apella t-shirts through its retail locations.

Sourced direct from the product creator at an international gift fair months ago, newsXpress is helping members launch the products in-store with stunning displays, a professional (A1 printed both sides) poster and a locally made marketing video.

newsXpress sourced the t-shirts direct from the supplier. It has managed the launch inn Australia: providing marketing posters, producing videos, creating best-practice displays and supporting the launch with a massive social media campaign and backing it all with a terrific website.

Here is an in-house produced video launching the product:

Here are a three of the in-store displays:

Here is newsXpress collateral provided in digital and A1 format for in-store use:

The reasons for sharing this are to show the launch of a product that is different to what you might expect to see in a business from the newsagency channel and to show how the new product is being launched in-store.

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Management tip

Here is something any newsagent can do to increase card sales

Put cards where people are most likely to purchase them.

While that sounds like common sense, many newsagencies are not structured or built for this approach.

Historically, newsagency businesses have been established with a card department created on the belief that anyone wanting to buy a card will enter the shop and look there. And they do, in good number.

However, cards only in the card department misses the opportunity to win impulse purchase business.

With many more types of retailers selling cards today compared to just a few years ago, we need to get better at tapping into the impulse purchase opportunity. Hence my advice:

Put cards where people are most likely to purchase them.

This means putting cards with gifts, in multiple locations in-store, and doing this with the careful thought of an editor making considered style decisions. It also means reviewing the placements every couple of days, to ensure they remain what you want.

Adjacencies matter with the type of card placement I am outlining here – the right products with the right cards. The goal is to sell both, oh, and a bag too.

Almost every department in a newsagency can support thoughtful card placement. But not all at once as that defeats the purpose of shining a light on cards.

There are obvious choices like baby cards with baby gifts, like in the photo with this post. Teacher cards with teacher gifts, male birthday cards with male birthday gifts.

But what about a display of gifts with sympathy cards, new home cards or thank you cards. In these three we have opportunities to source gifts to support the placement of a selection of cards from each caption outside the gift department.

Growing card sales in the newsagency can be achieved if we engage with cards in ways that have not been common for us. This suggestion of thoughtful placement of a small selection with gifts and other items is tactic way I am sure can help grow card sales.

Note to card companies: don’t tell retailers what cards to place where. Let them make those decisions in-store. By all means support with space efficient stands that are not made noisy with branding. However, retailers haver to make editorial decisions themselves.

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Greeting Cards

Newsagency mareting tip: preference suppliers who promote you

Before you take on a new supplier, ask them what they will do to help drive shoppers to your business. Specifically, ask if they have a link on their website to their stockists and whether they would add you to the link.

If there is no link then the relationship will not be as valuable as it may be – especially if the brand is well known and sought after.

The more suppliers linking to your business the better.

In terms of existing suppliers, check out how they promote small business retailers compared to big business. If they favour the latter over you, have a conversation with them.

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Management tip

Free newspapers home delivered for 6 weeks through UK campaign

An interesting campaign developed by News UK has been released online pitched six weeks of free newspapers home delivered with local newsagents undertaking fulfilment. The papers are free. The customer pays the newsagent the usual delivery fee.

The website is worth reading as it provides several insights that I think distribution agents in Australia would find interesting. The information provided is useful and the way it is organised is excellent, simple to follow and offering go to points if someone reading the site needs more help.

This initiative is good because of its focus on what is a core, sometimes only, business for newsagents.

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newspaper home delivery

Australian Aviation turns 40

Aussie aviation magazine Australian Aviation has turned forty.

This is an excellent achievement for a locally published special interest title. The birthday issue is an opportunity to shine a light on it in-store and on social ail medial.

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magazines

Tatts says: LOTTOLAND’S GOTTA GO!

Okay so the folks at Tatts have woken from a year of slumber about Lottoland. On top of their TVC, which I wrote about a couple of days ago, they have emailed their retailers today with this:

This is not the whole email. It contains call to action instructions and links to resources.

They should know that black text on a red background is hard for many people to read, especially some people who are colour blind as they see it as black on black.

Here is a copy of in-store collateral they are making available for use:

Tatts should have responded many months ago. Now, they have engaged in what some newsagents have said to me in an over the top campaign. With all the brightness of tatts collateral in-store and the requirement to not place non product material in the tatts space, Tatts is asking retailers to put up more distracting material that I suspect will get lost.

I think Tatts could have approached this in a smarter way. Not for a week or two weeks but with a long game in mind.

What they ask retailers to do in-store should reflect their TVC.

They have had a year to get this right. The email to Tatts retailers feels rushed and like it misses the mark. The messaging feels rushed, scared and inappropriate to the needs of local small businesses and their communities.

Thinking about this further, this in-store campaign feels like tatts is doing lip-service to its retailers rather than actually trying to address the issues. Our the TVC is excellent, but this campaign is not.

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Competition

Menzies’ UK newsagent terms change set to impact small business cash flow

A colleague newsagent from Ireland emailed me yesterday about a significant change in trading terms by their managing and newspaper wholesaler. Here is their story, which I have edited slightly to remove identifying information:

I am the guy who gets up early in the morning, every morning, to haul the bundles of magazines and papers into my store where I carefully and proudly display title after title, many full facing to entice the reader, your customer…to buy. I am the store they love to go to, to browse the hundreds of titles on display.

My store and many more like mine is where your products reach their buyer.

Menzies Distribute your product in Ireland and recently bought out Easons from the EM News Distribution in Ireland. It would seem that they are deploying new tactics too.

We have been newsagents for decades. We have always paid our suppliers on time and the same applies to Menzies. For the record we do not owe any outstanding invoices over 30 days to Menzies.

However I recently received an email from Joanna Nizynska, who represent the accounts department in Menzies in Edinburgh, informing me that our payment terms are now changed to the following:

“all invoices within a calendar month due on the 1st of the next month.” So we are invoiced every Saturday for the current week and all invoices then in August, must be paid on September 1st.

This is effectively a reducing credit term with the last invoice of the month possibly having only days credit?

Without access to the standard terms of 30 days credit most retailers would close.

I am asking for your help where possible to make representation on this issue.

It has been implied by Menzies representatives that If i don’t meet these new demands that i may suffer disruption to the supply of papers and magazines to my store. In other words they suspend or close my account. Bullying me into accepting new terms and conditions or face no supply as they have a monopoly in Ireland.

Is this how we want the industry to go, is this what you the publishers want? is this what you the trade representatives want? We all know the stats in terms of print media but a bigger issue in my opinion and a factor in the whole story is how Newsagents all over the World are being treated by the industry.

Encourage us instead of badgering us, incentivize us instead of penalizing us, help us to help you grow!

Is this the end of the road for Newsagents in Ireland?

How would Australian newsagents feel if any of their suppliers introduced such a change to trading terms?

My opinion is this move by Menzies in the UK is bad. I agree with the newsagent who originally wrote about it. Eliminating usual business trading terms will hurt small business retailers for sure.

If costs have increased, suppliers need to have their customers, the magazine publishers, pay. It is unreasonable to force small business owners, those located at the bottom of the food chain, to pay.

We see this in Australia with uneconomic terms of magazines causing newsagents to react by reducing their space commitment to the category.

At some point publishers and distributors will wonder what happened. Them being disrespectful of small business retailers is what happened. That is what I think is happening here in this story from the UK.

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magazine distribution

International Sudoku Day opportunity

The Group International Circulation & Trade Marketing Manager at Puzzler in the UK let me know yesterday that this coming Saturday, September 9, is International Sudoku Day.

This is an opportunity for newsagents who would like to engage and pitch their range of sudoku titles. Here is their note to me. I encourage newsagents to read it and consider engaging with the opportunity.

I have followed your Newagency blog for a number of years while working in the NZ, Australian and now UK magazine markets. The information you share across your channels I find can be useful for retailers, distributors and publishers alike – so thank you for the variety!

The article you wrote on the 30th August regarding the placement of crossword and puzzle titles in news agencies got me thinking, and while I’m not sure whether this one is up your alley, I thought I’d share it with you on the off chance.

This Saturday, the 9th September, is International Sudoku Day.

Launched by the World Puzzle Federation in 2013, September 9th is a day each year where we celebrate the Sudoku puzzle.

This date (9/9) is symbolic within Sudoku and was chosen to reflect the 9×9 grid pattern found within each puzzle.

Attached, you’ll find some artwork we’ve done up to help promote International Sudoku Day in the Australian market. Perhaps there would be an opportunity for you to share this with your fellow newsagents?

Please let me know if there is anything further I can provide you with to help mark this great opportunity to boost the sales of Sudoku titles in Australia!

Here is the poster art provided. I plan to use it on Facebook. You can right click on the image to download the full size version.

Remember, the crossword / puzzle category remains strong with magazines, delivering year on year results in Australian newsagencies ahead of most other magazine categories.

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crosswords

Westfield Southland introduces a new ‘tax’ on small businesses and retail workers

Here is the announcement from Westfield yesterday to business owners and employees at their Southland centre. This move to charge for parking is a tax of retail workers and a tax on small business owners.

For the record, my business there will pay the parking fee for full time staff and those working two shifts or more Monday through Saturday.

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Newsagency management

Is the Fairfax newspaper distribution fee not as good as it seems?

Distribution newsagents logging in to their account get different information to that which I posted here today I am told.

Click here to access the document Fairfax distribution agents can access. It contains some language differences to the public announcement.

Several distribution newsagents have asked me to post it here as they say it contradicts the public statement. They say they are not that better off and that in real terms they are worse off.

Here is a comment from one newsagent:

I read the Blog item on Fairfax fees and thought others may have a head rush as I did and think that Fairfax had seen the light increasing delivery fees.  We received the notice you posted last week and it wasn’t until I checked the file attached on Fairfax website that  I saw the missing line that shows delivery fees have hardly changed.

I think it is very tricky on Fairfax’s part to have two lots of info.

Here is another.

Not only do they not maintain our fees in line with cost increases, they make every interaction with them harder and more expensive making this latest meagre rise a joke. I should have got out of home delivery years ago. I hate it every day because of moves like this one from Fairfax.

There is no upside in newspaper home delivery. I’ve been saying that for years. Indeed, I outlined in detail my position when I sold by round in 2006 and again six months later.

In researching back on what I have written on this topic, I found a piece from 2005 that remains timely today.

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Newsagency management

Value add is a better marketing move than discounting

Discounting is lazy marketing, unless it is an end of line discount to move the last of stock you have or unless it is an event related discount.

Everyday discounting is what I am saying is lazy marketing, discounting being done so you can say you are cheaper than other retailers.

I say discounting is lazy as it is easy. It is easy to copy or beat, making it risky.

In my experience, a better approach is to change the conversation, to change how people view a product. You can do this by bundling the product with other items to create a hamper or package that is unique to your business. You can also do it by creating a multi-buy offer of a price for a single or a better price when, say, three are purchased. You could also create something unique in your business as a value-add for the product, something that the customer will appreciate, that they can only get from you.

There are other approaches you could consider too where a product is seen as being a better offer from you even though you are not discounting as such.

My point is, discounting is easy to do and easy to copy. Shoppers buying only on price are not loyal. Add value is some way and you are more likely to be remembered by a shopper.

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Management tip
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