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

Author: Mark Fletcher

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.
6 likes
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

Monitoring shopper forums is as important as listening to customers

Local shopper forums are another place to check and watch for comments about your business, especially in regional and rural areas.

These local forums, usually on Facebook, are often started by shoppers. You have to get permission to join. It is important you do this to every such group in your area so you can see what they say.

As well as providing a live insight into what your customers and would-be customers like, you can see first-hand if your business is mentioned.

People can be fierce in these forums. I saw one regional Australian small retail business ripped apart recently because of one poor customer service experience that was not handled well. Rather than complain to the owner of the business, the person tore shreds off the business and rallied support for others on the group to never shop there again.

Back in the day we retailers would talk about one poor customer service experience rippling out to, say, thirty people. Today, that number could be in the thousands thanks to social media.

By being on a local shopper page you can comment in your business is unfairly targeted. If the business screwed up, own it. If the business did nothing wrong, own that. At least by being on the group you can be aware of what is being said about you and how people are responding.

Sure, you can ignore these groups – but you may miss an opportunity ti right a wrong.

The New York Times yesterday published good article about groups and while not directly connected with what I write about in my post it makes interesting allied reading.

10 likes
Ethics

newsXpress invents a season and drives traffic for its members

Two years ago newsXpress launched unicorn promotion. It was a success.  Last year, it expanded the promotion, launching Unicorn Season. Thanks to the support of a group of different suppliers, terrific in-store displays and collateral and online marketing, it was a hit.

This year, on July 1, newsXpress launched Magical / Unicorn season – a broader season build around the fun, magic and mystery of unicorns.

This now established season has broad demographic appeal. It is also easy to engage with in-store as well as online. Plus, it is a leave-behind opportunity, with unicorn and related products a key segment offer inn the gift department.

Attracting shoppers through a campaign that is fresh and banner group specific is a good move because there is less competition in this same space. I think that is a factor in the success for this season.

While the usual seasons remain important, it is these new seasons that can be more valuable at driving incremental traffic and purchases.

Here are a few photos of in-store execution from different newsXpress businesses.

There are plenty more stores engaged than these four. The traffic and revenue success tells us this type of blue ocean promotion is well worthwhile.

The supplier offer is broad with ten different suppliers offering products for this season.

The season is worthwhile because not recasts how people see each business and what they expect they cn purchase there.

While I see other retailers, including some newsagents, with unicorn products, none has embraced it as a season with in-store support through collateral, events and more.

As our channel continues to evolve through falling traffic for newspapers, magazines, stationery and lottery products thanks to online and other factors, we must create other opportunities for shoppers to visit our shops. This is where unicorn season, and similar fresh and unique seasons, play well for us. The new shoppers they attract can become shoppers beyond the season. Existing shoppers, too, as I have noted, spend up thanks to a great display.

This season is one example of how we can grow our businesses in the face to the doom and gloom of some. It is not too late.

Footnotes:

  1. To any who may make fun of this when talking to colleagues in the channel, and not here, unicorn season is one small tactic of a comprehensive year-round online and offline newsXpress strategy pursuing new traffic and revenue. Any criticism would be ignorant without store performance data.
  2. I am a director of newsXpress Pty Ltd.
18 likes
Newsagency management

Time – Game of Thrones

With the new Game of Thrones season upon us it would be terrific to have easy access to this special issue of Time magazine to place in the pop culture department right now. It would sell easily in newsagencies that play in the pop culture space – a space that is valuable at attracting new shoppers and driving basket depth. It’s a perfect fit in the newsagency.

0 likes
magazines
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