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

Author: Mark Fletcher

Clever Lottoland TVC

This TVC from Lottoland was in high rotation on free to air TV last night. It is a clever ad, looking like regular, timely, programming. Looking like legitimate lottery products on sale. While I get that state governments are crawling to resolve the Lottoland operation challenge, Lottoland appears to be spending like there is no tomorrow.

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Competition

Stunning puzzle magazine section

Check out the stunning puzzle magazine section I saw at a news and magazine outlet at Copenhagen airport. I like their use of the front of the fixture from the front to the corner to the side, the placement of pens and pencils, the value offer and the shopability of the display. Every centimetre of space is used deliberately and effectively.

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crosswords

Why don’t we have a bigger history section in magazines?

Check out the extraordinary display of history magazines at a news and magazine retailer I visited this week in Copenhagen. Their extensive range of history related titles is extraordinary. We would be lucky to have 10% of these titles. While I get that history would be a more popular category in Europe than Australia, the extent to their range compared to ours is surprising.

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magazines

Timely Shoptalk Europe conference

I have been in Copenhagen this week, immersed in the Shoptalk Europe conference, which brought together attendees from high street retail, online retail, tech companies and venture capitalists.

The conference has been especially timely given the intensification of focus online in Australia as a result of the Amazon move.

The most interesting presentations were by retailers outlining how they are using tech to drive innovation in their businesses. Most are quite candid about their experiences and results.

Speakers included folk from plenty of retail sectors including flowers, bikes, services, gifts, fashion and homewares.

There were some terrific presentations on how businesses have transformed from traditional high street models to omnichannel.

Not one presenter spoke negatively about investing in online. While that might match your expectation for a conference like this, the environment was open and candid. Successes were detailed from revenue growth to something and basic as neutering the impact of the decline from a legacy part of a business by growing i a new online-focussed area.

Stephen Lowy from Westfield was a speaker on Monday, talking further about the expansion of Westfield beyond its traditional property play and into a collaboration-focussed data / tech play. This week Lowy went further than I have heard him speak in this at past conferences. If you think about it, Westfield has similar challenges to newsagents, but win a bigger scale.

Every speaker was from a business that invested in their future. They had gone out and pursued new traffic and more efficiency shopper engagement. They were not sitting and waiting to see what happened. They were making it happen. It was invigorating.

I am not sharing specific insights here as this is not the place. I plan on leveraging what I have learned for and with those I work with in the newsagency channel and elsewhere.

There is no time to waste. Every retailer needs to be online, so they can be found by anyone, anywhere, and shopped 24/7. Think of business today as a race to cash. Whereas in the past you might think about another shop in town or in the next town that a local customer could purchase from. Today someone who could spend money with you could easily do it anywhere at anytime. You have to match this pitch.

Regulars here would know that through newsXpress I have driven an advanced online strategy with several customer-facing websites. That is on track to expand shortly. Shoptalk Europe has helped to flesh out my 2018 planning.

These are exciting times for anyone who enjoys change.

Footnote: The conference opened with a performance by the Copenhagen Drummers. Their performance set the tone for energy, focus and enjoyment.

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Newsagency opportunities

Yes, Amazon is coming. No, the world will not end.

I am frustrated with the world is ending type reporting relating to the arrival in Australia of Amazon. Most stories are not reporting. Rather, they are ignorant speculation, fear-mongering. I even wonder if they reflect a wish. Unfortunately, the wrong people are quoted, like the ever-shrill Gerry Harvey.

I hopped into the studio last week and shot this video to provide some perspective on the arrival of Amazon and to share some thoughts. While I shot this video for use through my POS software company, I think it may be of interest to some here:

Like any good competitor, Amazon challenges us to improve our own businesses. What makes them different to other competitors is their back-end efficiency. This is where we are challenged, where must focus the most on what we do and how we do it.

Amazon will set a benchmark in terms of fulfilment from how items are packaged to speed of delivery. Their investment in Australia will include encouragement for more Australians to shop online. This is an opportunity for us.

I hope the video offers useful thoughts rather than the sky is falling stuff we have been served by local news outlets.

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Competition

Make the most of terrific Better Homes and Gardens Christmas gift offer

Newsagents who are part of the Pacific Magazines nexus program have a terrific marketing opportunity to this week thanks to this Christmas-themed gift with purchase with Better Homes and Gardens magazine. These cake pans will be popular – but you need to be onto this right away.

Placing the display unit at the front of the store, where every customer entering the business can see it, will increase sales. This is not a hope, it is fact based on the sales results from last year. Comparing the performance of stores with a gift with purchase offer in a stand like this placed in the best location versus those without and those who did not leverage their stand.

My advice is if you are part of nexus, go out with this stand right away, in the best location. Plus, promote it on social media. This is a traffic generating opportunity as it differentiates your business from competitor businesses. Understand the value of being able to say shop here for this limited-edition gift with BHG that it will be hard your you to find in other retailers.

Yes, I have said here before that promoting magazines on social media is usually not worth it.l This is different in that you have something to promote that others do not have. That is why I say go for it!

If you compete with supermarkets, c-stores, petrol outlets and similar, actively leverage this offer as they will not have it. This is your moment to distract from them.

How well we as a channel engage will be watched not only by pacific but by other publishers. This is out opportunity to show we can do national differentiating promotion well.

While the gift with purchase pack does have a slightly higher cover price, the increase is considerably less than the value of the gift.

Note: retain these bins as the December issue of Home Beautiful will be supported with another NEXUS only GWP that is also themed around Christmas and is a bakeware.

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magazines

Management tip: take care when sourcing shop layout advice

Plenty of newsagency supplier representatives will have an opinion on shop layout, fixtures and related topics. While these opinions can be useful, they need to be considered knowing the retail experience of the person and their core motivation.

Shop layout and fixtures are changing rapidly. Unless you are actively invested in retail businesses yourself, your perspective may not be current or useful to those being asked to make the investment.

The best advice is that which you can give yourself, based on your own business data and your own retail skills as well as that which you can access from any retail management or marketing group of which your business may be part.

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Management tip

Marketing tip: the value of interest tags on social media posts

Using an interest tag on a Facebook post can reduce the reach of the post. However, it can also ensure the post is seen by more people who will appreciate and / or engage with the post.

My advice is that you research a tag prior to using it. Get a feel for its value in terms of reach. If you gauge sufficient appeal, use it.

I used the tag teacher recently and got a post seen by people who may have otherwise missed it. The actual reach of the post was lower than usual yet the practical engagement was higher.

Tagging interests takes time. The rewards can be valuable.

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marketing

Retail marketing tip: Reinvigorating Saturdays in the newsagency

Years ago, Saturdays used to be big in retail newsagencies, back in the day of fewer lottery draws, little or no Sunday trading and less late evening trading.

Today, the value of Saturdays has slipped for many retailers including many retail newsagents.

Something needs to be done to reinvigorate Saturdays. What it is that needs to be done will vary based on local situation. My advice is that you engage with a considered, planned, campaign to lift Saturdays. Make shopping your shop on a Saturday more fun and more valuable.

Here are some suggestions to get you thinking of what could work in your shop:

  • Host parties. Monthly. Based on brands you sell. A part for each fun related brand.
  • Host a local club that connects with products you sell. Like a knitters club or a jigsaw club.
  • Use the day for unpacking new product and get known for Saturdays as being the day for new product.
  • Play. Make it a day of fun in the shop sampling product and playing with things.
  • Free cake. Everyone loves cake. Maybe do a deal with a local cake shop to have a free cake to be sliced up at a set time every Saturday.
  • Draw prizes. If you do a lottery second change draw, draw it ion a Saturday with a bonus for the winner if they are in-store.
  • New displays. Make it a day of major change, noticeable change, in the shop.
  • Promote deals, maybe based on a Saturday Savers branding.

What ever you do it has to be about your business as it is the commercial outcomes you are looking for. I mention this so you can focus on what you need rather than what a local group may need / want ahead of you.

Of course, you could do nothing about Saturdays and your numbers in the future would continue the trend you are on today.

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Management tip

Leveraging Better Homes and Gardens and puzzle titles

Here is one of placements of Better Homes and Gardens plus the Better Homes and Gardens All I Want For Christmas title, Better Homes and Gardens Code Crackers and That’s Life Word Search blocked together.

This blocking works as to leverages the brand connection of three of the titles. It results in more multiple purchases and we like that.

Try it, it works.

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magazines

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