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

Author: Mark Fletcher

Lotterywest improving relationship with newsagents thanks to new WA Premier

I am grateful for the opportunity attend the lottery forum and luncheon hosted last Friday by ALNA at Crown in Perth.

This was an honest event. I call it that because at its core were presentations from newsagents about the bad experiences with Lotterywest over the last few years. Their heartfelt stories made the situation real.

There was tremendous kudos for ALNA and their considerably work supporting newsagents, lobbying politicians to bring about change and their support of newsagents if what has been a difficult time.

There was equally tremendous support for Mark McGowan, the new Premier of WA – for the swift action his government has taken to deliver on their election promises about driving change at Lotterywest. His speech demonstrated a good understanding of the challenges newsagents had been facing.

I was seated next to the new CEO of Lotterywest. We had a good chat about the challenging situation inherited and the complexities of bringing cultural change to the organisation. Lotterywest has been on a path for the last few years that is now set to change, thanks to the change of government.

I also had a good chat with the Premier about what his government has inherited in WA. His appreciation for small business is encouraging for all WA small business owners.

In his speech, the Premier also spoke specifically about Lottoland and the nature of the product. The newsagents in the room liked what they heard.

Both the Premier and the new CEO of Lotterywest have a commitment to small business and, in particular, family businesses, like newsagents. Newsagent access to them is at a level I have never seen for our channel in the past. And, as I noted above, this is due to the work of ALNA in WA.

The luncheon is a credit to everyone involved. Many newsagents I spoke with told of how relieved they felt now compared to earlier this year when they though all hope was gone. The optimism in the room was wonderful, and exciting.

What has happened in WA is a lesson for newsagents across Australia of what can be achieved by working together relentlessly, with focus, on a issue that decision makers can fix.

I was at the luncheon as my newsagency software company was a sponsor of the event and in support of the many newsXpress members who make up the WA newsagent community.

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Lotteries

Sunday newsagency management tip: isolate labour by function

Too often I see the mistake of retailers not understanding the real costs of a product category because they to not allocate labour costs to a department, category or supplier.

Do this at a high level and you should be able too understand what you are really making from that product category or supplier.

This is the approach used by newsagents with deliveries years ago when they started selling off their territories. You can use the approach for lotteries or other agency like products and services you offer. However, I’d focus on the big ticket items.

Sure there is a management cost to get to this analysis. Th result is a better understanding of the real value of a product c category and / or supplier.

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Management tip

Sunday newsagency marketing tip: parties help you find new shoppers

We hosted a shopper party of one of my suburban shops last weekend and achieved more than $2,000 in incremental, good margin, business compared to a usual good Saturday. The party was a terrific success. We are thrilled.

While plenty of customers were local, some travelled and far as two hours to participate in the party.

We spent little on the event and offered only modest discounts. The keys to success were the opportunity for the customers to network with those who share their passion and to see some unique products.

Our marketing was primarily on Facebook. Someone living in Perth called their sibling in Melbourne and told them to come to the party to purchase for them. They did, spending over $100. Based on our conversation, I am sure they will come back.

Simple parties are effective. They are an essential part of the mix to attracting shoppers to the business who otherwise not shop with you.

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marketing

Great news story about how discount vouchers help drive an excellent outcome

I launched discount vouchers in my newsagency in February 2013. back then, it was the first time anything like this had been tried in the channel. I still use discount vouchers today as they are a profitable part of the retail mix in the business, encouraging shopper loyalty.

Recently, a newsagent talked publicly abut an experience with discount vouchers. I share it here in their words:

Yesterday a customer called and paid for 2 Perfect Petzzz over the phone. Came in today to see if she can pick them up.

I gave her the $18 discount voucher for the 2 Perfect Petzzz, she was delighted and bought 2 Ravensburger and 2 angel flames because of the discount voucher. Of course she got another discount voucher of $8.09 for that, and decided to use the voucher for Harry Potter beanies 😀. Upon receiving another discount voucher of $5.84, she smiled at me and said “I think I better get out of here 😀

Not only do discount vouchers change shopper behaviour, they also alter business owner and staff behaviour. I see this time and again in comments from retailers to me about their voucher experiences. I love the stories of happiness about what is being achieved through such a simple customer loyalty offer.

People understand $$$ moire than they understand points.

With the business owner having complete control over the levers and other business management touch points, it is easy to ensure the vouchers are profitable, easy to have the right encouragements to guide shopper behaviour to serve the business and to reward the shopper at the same time.

I have seen newsagents implement discount vouchers and become more engaged with and happy about their business as a result.

This story above is one example of a retailer who was skeptical who is now loving the outcomes being achieved. It also shows how a an easy and cheap to implement marketing strategy can improve the business. The lead time from deciding to implement to being live is minutes with no capex.

Footnote: The discount voucher facility to which I refer here is from Tower Systems, a software company I own. No other software company in the newsagency channel has the discount voucher facility that Tower has. While anyone can use the term discount vouchers, I know from experience that no two software products are the same in this area. It is actually an interesting comparison point.

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Newsagency management

Will GNS survive?

This is the question asked of me by newsagents more often so far this year than any other question.

Will GNS survive?

I am asked by newsagents who calls or email me with whom I have no relationship. I am asked by Tower Systems software users at user meetings and other placed where we meet. I am asked by newsXpress members at our regional member meetings. I am asked by suppliers too.

I never prompt for the question.

My answer is:

I don’t know. The business appears to havre not kept up with today’s business requirements. It may have left it too late too transition from a high labour cost wholesale model that is not relevant today. So, I don’t know the GNS future. I have no inside knowledge, no knowledge of their plans. All I know is what I see.

People who ask me the question often do so with complaints including some or all of these:

  1. Out of stocks make GNS an unreliable supplier.
  2. Their prices are too high.
  3. They are restrictive in what they carry from brands.
  4. Delivery is taking too long.
  5. Stationery is down and GNS is not as important to me as they used to be.

I’d hate to own and run a stationery wholesale business today. There is no upside with suppliers going direct (as they should) and with online accounting for far more stationery purchases than the old-school stationery wholesaler infrastructure anticipated.

Today, a pure online play fulfilling orders from a low-cost regional DC with minimal staff is the way to go. However, once the Amazon DCs are established expect a further challenge to stationery sales in newsagencies.

GNS exists in a rapidly changing space, as do newsagents. To me, the question act whether GNS will survive is also a question of whether stationery in newsagency businesses will survive. It is easy to look at the other person and question their future than look into your business and ask this of yourself or at least of part of your business.

The question is interesting to me more for the broader business questions it poses. We need to contemplate the product mix in our businesses. This has to be done on an individual basis and not at a shingle level as now more than ever our businesses are individual and not a channel or network.

What I will say is that the challenges GNS faces today were there ten, even fifteen, years ago. The board back then failed to act, they failed to see the changes on which they needed to focus GNS resources. The same can be said for newsagents when it comes to stationery.

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Newsagency challenges

Managing labour costs for profit in your newsagency

In my previous overall business benchmark advice I provided this guidance on your target labour cost benchmark:

  1. Labour cost: between 9% and 11% of revenue where revenue is product revenue plus commission from agency lines. Labour cost should include fair market costs for all who work in the business.

What this means is: if your revenue, where revenue is product revenue plus commission from agency lines, is $1 million, your total labour cost should be $110,000.

Labour cost needs to include fair market value for owner labour invested in the business.

Too often, I see newsagency business owners putting in anywhere between 60 and 80 hours a week with the majority of this time unproductive.

A small business cannot afford unproductive management time. Your big business competitors do not have this overhead, nor should you.

This is why I suggest you have no back office or, if absolutely necessary, a small back office that is not comfortable.

There is an added benefit of no or a small uncomfortable back office – you migrate pricing and other work to the shop floor. Do this and revenue will increase.

While many go into business to be the boss and not at the front line serving customers, the front line is where the business makes money. It is where you ought have your best people.

Allocate your boss time to fit with the size of the business. In a typical small retail business turning over $2M a year or less, I suggest boss time should be no more than five hours a week. This, of course, depends on what you do with the time. If you do bookkeeping, saving the cost of an external resource, it could be more.

A more practical way to look at this is issue of labour cost: cutting three hours paid adult time a day, Monday to Friday, will add more than $20,000 a year directly to the bottom line profitability of the business.

If you think this is not possible, look at where you do your boss work. Some of this could be done at the counter or on the shop floor. You could multi-task and thereby cut paid hours. It all depends on whether you want the business to be more profitable.

One newsagent following my advice on this cut labour costs in the business by $50,000. In the same period, revenue was up 6%.

Getting your labour cost under control and within the benchmark starts with your roster.

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Management tip

Understanding the BHG shopper

Pacific Magazines publishes terrific information that helps newsagents understand the Better Homes and Gardens shopper. These insights help us offer additional products to the shopper visiting the newsagency to purchase this title. Here are recent insights shared with newsagents by Pacific about the BHG shopper:

  • They are enthusiastic, creative & very resourceful – they know what they want from their lives and achieve what they set their minds to- they are doers not dreamers.
  • Family is at the centre of their lives, and the decisions they make – whether what to cook for dinner or a major renovation project – are made with the comfort and best interest of their families in mind.
  • They take pride in their home and want people to always feel welcome in it; they’re always looking for new ways to improve their lives and their home.
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magazines

Tatts softens position on digital screen demands on small business retailers

At the end of an email to retailers, Tatts made this announcement:

Retail Image News! 
Keeping pace with an ever changing, competitive landscape, we are pleased to announce an update to our Retail Image program.

The majority of outlets will now have the choice to install one or more digital screens in their new Generation One DigiPOS retail image.

Larger outlets will still be required to install a minimum of two internal screens.

Any retailers with shopfits currently in the pipeline or those with a retail image due will receive communication shortly.

The company has made no announcement about the retailers forced to put in two screens where one would have been sufficient and where the second screen has lumbered the business with a capex outside what would be reasonable for the business.

Oh, and still no evidence from Tatts supporting a business case for their cap[ex demands on their franchisees.

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Ethics

Is the Tatts new digital signage responsible for a decline in syndicate sales?

Syndicate sales are down as a result of the new Tatts mandated digital signage according to several tatts retailers I have spoken with over the last few weeks.

Some have been specific in their comments, looking at Sydney irate sales on a like for like basis in terms of jackpot value and at super draw times for Saturday sales.

Some have commented that customers struggle to know what is available given how tatts has required they place signage in their businesses.

Whereas in the past, signs were placed to interrupt shoppers, the Tatts digital and future image requirements take away what was successful space for promoting syndicates.

In one case, I am told the Tatts rep told the newsagent to stick signs in such a way that the auditors tatts sends out would breach the business.

My question is genuine: Is the Tatts new digital signage responsible for a decline in syndicate sales?

Please comment here. By all means use a fake name so the tatts people who read this blog cannot identify tiny you an therefore pay you a visit.

Two newsagents have told me of them having to purchase more unsold syndicate tickets following the installation of the new image and digital screen. In each case they don’t have the capacity to fund such underselling. The situation is forcing them to rethink their syndicate strategy.

I am posting this today because I have been asked to. Newsagents what to know if they are alone in their declining syndicate sales experience. Are you?

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Lotteries

Buying lottery tickets in the US

A week ago in Atlanta I saw these vending machines in more places than I saw lottery outlets. Here are photos of one machine, showing what it offers and how it handles things like age checking (not).

In New York I saw this small lottery only store with a similar vending machine.

At another location in New York I spotted this news outlet with their required lottery counter – yes, this is all the space their lotteries supplier requires.

I am yet to see lottery outlets as controlled as we see in Australia and lottery fitouts as dominating as we see in Australia.

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Lotteries

Sunday newsagency management tip: be careful who you purchase from

I heard of a someone doing the rounds of newsagencies in recent months selling gift items from the boot of their car. During the pitch claims are made and promises given. The claims sound too good to be true. They were. Newsagency have been left with stock that does not sell, products that are not as good as the slick sales pitch made them out to be.

My advice? Never buy from a sales person from whom you have never purchased previously, who walks in, unannounced, selling goods from their car. 

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Management tip

Sunday newsagency marketing tip: use images of card to promote your business

Dig into your cards for funny, unique and hard to find cards and use images of these on social media to subtly educate people about the card range you have.

Few card retailers pitch  cards unsocial media. This is an excellent opportunity for small business retailers.

Funny cards work well as do cards with cute dogs and cats. Also, cards with heartwarming messages and beautiful images.

The keys are to choose carefully and it use the social media posts to show people you have a broader range of cards than they assume you have. Show them they are wrong.

6 likes
marketing

William Hill launches Planet Lottery, with Lottoland

William Hill has launched Planet Lottery in Australia, with Lottoland. Gambling Insider has the story:

William Hill Australia have today announced the launch of a new integrated lottery platform, which will allow its Australian customers to bet on some of the world’s biggest lottery contests.

The ‘William Hill Planet Lottery’ has been developed by William Hill in conjunction with Lottoland, following the agreement of a partnership deal between the two last month. Players will be able to bet on the results of lottery draws via their mobile or tablet, with all bets being guaranteed by Lottoland.

In a statement marking the launch, Oliver Scott, Head of Corporate Development at William Hill said: “William Hill is a leader in Australian betting, and we are thrilled to make this innovative and exciting new offering available to our punters, to bet low stakes for the chance to win goliath jackpots.”

This launch marks the first time that an Australian sportsbook operator has entered the lottery betting market. Lottoland has come under fire in the UK over recent months amidst concerns about whether operators should be allowed to take bets on the outcome of lottery draws.

In March 2017, the UK Department for Digital, Culture, Media & Sport launched an industry-wide consultation into whether such betting contravenes section 95 of the UK Gambling Act (2005). The consultation period for this closed in May with results due to be published later this year.

I expect this will intensify the competition for newsagent lottery outlets. Tatts cannot get this pass without response, as it has done with Lottoland since its launch.

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Competition

Magazine publisher withdraws from subscriptions, in support of newsagents

Puzzle People, the publisher of several puzzle titles, has withdrawn from subscription services.

In an editorial in the latest issue of Cryptic Crosswords, the publisher made it clear that the title would only be available from newsagents.

This clear announcement is a reason newsagents should actively promote Puzzle People titles. The publisher is actively supporting the newsagency channel, newsagents should actively support the publisher.

Puzzle People is a small publisher. In this ear of more and more overseas content making its way onto print pages in Australia, local content is more important than ever.

When I suggest in this post that newsagents support the Puzzle People titles, here is what I mean in practical terms:

  1. Place their titles in prime position in the crossword section.
  2. Co-locate next to your top selling weeklies.
  3. Alternate a third placement with newspapers and the counter.
  4. Talk about the publisher on your business Facebook page, thanking the publisher for support.
  5. Make sure your staff know why supporting Puzzle People matters.

The alternative is to do nothing and that is not what the publisher is doing in terms supporting our channel by backing out of subscriptions.

It is not often we see a publisher support us in an editorial.

21 likes
magazines

Reports Facebook will launch a subscription news service

The Street is reporting that Facebook plans to launch a news service, in apparent partnership with news publishers:

“One of the things we heard in our initial meetings from many newspapers and digital publishers is that ‘we want a subscription product — we want to be able to see a paywall in Facebook,'” Brown said at the Digital Publishing Innovation Summit, an industry conference, in New York City on July 18. “And that is something we’re doing now. We are launching a subscription product.”

The paywall idea is based on premium and metered plans and has been in the works for a while, Brown said. It’s aimed at appeasing news organizations which had complained that they had little control over how their stories were being exhibited on Facebook. The News Media Alliance, which petitioned Congress, charges that Facebook and Google benefit from the work of hundreds of newspapers without fairly compensating publishers.

Print media disruption continues.

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Media disruption

XchangeIT reports to newsagents

XchangeIT yesterday sent out this report on the last year to newsagents:

Dear Newsagent,

Each year we provide a review of XIT’s deliverables to the Newsagent Industry. FY 2017 has been a fascinating and rewarding one for us, and it seems also for you.  Here are the highlights.

Support for Newsagents

We continued to provide support for over 2,200 newsagents throughout Australia.  The top two support categories in terms of volume of calls predictably related to our core business of EDI and High Quality data. Over 86% of newsagents consistently provided high quality data by passing their ITCs.  Well done.  In 2017 we began increasing newsagent’s active participation in the Variance measurement to position them better to qualify for No Physical Returns (NPR).

XIT’s strong support of the promotion efforts on the part of News Corp, Gotch and Bauer were the next highest support call categories.

It was gratifying to see that the fifth highest call volume category was for non-XIT matters, such as Windows 10 and anti-virus issues. We were willing to assist hundreds of newsagents with problems they were having with non-XIT technology or service, which would have cost them more money had they hired an IT consultant to fix them.

Value for money

XIT still provides superior value for money for newsagents, especially those on the highly discounted rate (most newsagents). Our latest ROI shows a return of 482% for newsagents who save three hours a week using XIT.  This percentage excludes any ROI from the Reconciliation or NPR programs, or the uplifts from the various Promotion programs run through XIT.

Value add

In addition to the very attractive ROI newsagents receive from the XchangeIT core business, we got a lot of pleasure adding value with our other programs. These were:

Reconciliation – enabling you to quickly and accurately reconcile your Returns claims with Gotch’s accounts each month, or to easily identify where there might be a gap between your claim and the Returns accepted by Gotch.

No Physical Returns – enabling you to save time and hard cash by qualifying to send no mags back to Gotch each month. Early indicators show 54.54% of agents are saving up to $40 p.w. ($2,080 p.a.).

Promotions – we facilitated promotions for News Corp, Gotch and Bauer.  Results varied yet our Promotions Reports showed an uplift of between 5% & 12% in many newsagents, for very little or no cash outlay.

Digital Marketing pilot – Over an 18-month period of research, design and development we produced a very successful Proof of Concept and Minimum Viable Product culminating in a successful deployment by December 2016.  We proved it possible to integrate any newsagent’s store with a viable on-line presence and then perform general and local promotions efficiently.  This knowledge and skill set will help us in our FY 2018 projects.

Subscriptions – we ran a successful project for News Corp to show we can extract subscription data from newsagent data, with permission, while keeping subscriber details private (required by newsagents) – truly an all-win outcome.

Going the extra mile

Network-Gotch cutover – we identified, rescued and then correctly transitioned those newsagents whose data got lost, misplaced, miscategorised, mislabelled, or generally missed.  This continued behind the scenes for months after the official cutover date saving agents money in “lost” Returns claims, while providing distributors with errant sales data, preserving data integrity and low fees for those stores affected.

Sponsorship – we continued direct sponsorship of newsagents via our popular Gift Card program.  Each month we deliver a gift card to at least ten newsagents to reward them for sustained good performance.

POS Supplier and Distributor related issues – XIT often discovered issues with POS or Distributor systems even before they did.  We aimed to solve them quickly, efficiently and behind the scenes.  A good issue resolution is when the distributor or POS supplier is informed by us they had a problem and “here’s how we solved it”.

Research and Development (R&D) – we spend a significant amount of money each year on R&D with the aim of improving XIT deliverables to newsagents.  Sometimes it makes it to market (e.g. Reconciliation) and sometimes it fails, to be put on the “let’s try again next year” pile.  This positions newsagents to receive the best technology XIT can deliver, with the associated benefits.

Thank you

The Team at XchangeIT comes to work every day looking for ways to produce All-Win experiences for our stakeholders. One day we might be perfect, until then we’ll try our very best, because as newsagents and distributors, you are our customers and we are grateful for your business.  So this is A BIG THANK YOU for being part of our lives.

Warm regards,

The XchangeIT Team.

 

4 likes
Newsagency management

New ‘rules’ for websites for small business retail

How people use websites for retail businesses has changed, not overnight, but gradually over time.

If you have a website created more than three years ago, which has not been structurally changed or updated since it is probably not helping your business.

Even if a website is there merely as an online business care, it needs to been certain criteria today to be found and of use to shoppers.

Here are some useful ‘rules’ I offer as  guidance for any retailer with (or planning) a business website:

  1. Ensure the site is mobile phone friendly. If it is not, Google will downgrade its ranking of the site.  Google announced red this more than a year ago. If you are not sure if your site is mobile friendly, access it from a phone and see if it is easily used without having to move the screen around. The site should automatically resize for the phone.
  2. Be clear about your online operation. Do not think you have to bring to online everything you do in your high street business. It could be your voice and persona online is completely different to in-store.
  3. Do not overload the site with stock. Include on the site products people will want to buy, products people will want to search for.
  4. Nail delivery. By this I mean make it certain for customers and easy for staff to run, for any staff member to run, to ensure deliveries are actioned asap.
  5. Make contact easy. the more human your site the more people you will attract.
  6. Pitch your brands. Your shoppers will be searching by brand more than they will search by the trading name of your business.
  7. Connect product pages to social media, make it easy for browsers to leverage your online content socially.
  8. Offer click and collect.
  9. Offer online LayBy.
  10. Ensure you take payment in a range of forms including PayPal.
  11. Promote the site in-store and on your social media pages.
  12. Get your pricing right. Online and in-store should match.
  13. Be prepared to completely replace the site in 18 months. That is the lifespan of a website as suggested by web experts and retailers who are successful in this space. While replace may be drastic, a complete visual and structural refresh may suffice.

These new ‘rules’ are a start. The represent the most significant changes from websites that small business retailers, including newsagents, were doing just a few years ago.

I think a website for a retail business is best approached as an opportunity for the business to sell to people the business would otherwise not reach. This thinking helps you focus on the site and its purpose as being different, broader than the website. It also helps you learn more about borderless retail.

How people shop, when and where they shop and why they shop has fundamentally changed in recent years. A good website can help any retail business, including there Aussie newsagency, to reach new customers and through this drive greater commercial efficiency from the physical retail business.

My thoughts here are another reason, of many reasons, why I am optimistic for businesses in the newsagency channel.

Footnote: I have written this post because I noticed some newsagents sill have the website created years ago trough GNS or NewWeb. Those sites from years ago serve no purpose today other than to remind people of yesteryear.

11 likes
Newsagency management

Airbnb magazine

I am surprised to see airbnbmag on the shelves in US magazine retailers given that Airbnb is an online driven business and given that Airbnb outlets regularly feature in  travel magazines. It’s not a bad magazine, very niche and probably not suited to most in the Australian newsagency channel.

0 likes
magazines
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