If you compete with The Reject Shop…
This Fairfax report may interest you.
The Reject Shop’s share price has continued to plunge, as market analysts suggest the discount retailer needs to start closing stores and question whether it can compete with supermarkets and department stores on everyday household items.
Tatts refit costs claimed to be a reason for small business closure
Of the five newsagents / lottery agents who told me last week they were closing, three claimed the cost of the Tatts refit requirement was a key factor.
While I think the retailers should have long ago made their businesses sustainable without lotteries, tatts does play a role by demanding small business retailers over capitalise to maintain Tatts products in the b business in a market where punters are clearly migrating online and where other retailers, such as supermarkets and On The Run in SA are not required to make the same investment.
As I have written here many times before, creating a business that does not rely on lotteries is hard work but it is also wonderfully rewarding … and you evolve into a better retailer.
AFR covers Lottoland challenge
The Australian Financial Review covered Lottoland and moves my Pauline Hanson to act against the business.
The newest kid on the online wagering block, who recently nabbed the naming rights to Manly Warringah’s Brookvale Oval, was back in the spotlight last week – not that anyone noticed. As the Senate plodded its way through laws to rein in foreign-owned betting companies, the First Lady of Ipswich, Pauline Hanson, moved a barely noticed package of legislative amendments designed to outlaw the Gibraltar-based Lottoland and throw a lifeline to the struggling newsagent industry.
I was interviewed for the piece. I wish they had room to write more of what I said as I went into detail of the harm the Lottoland ads are doing in their mocking of small business newsagents and how Tatts as a business is running dead on the challenge.
“Newsagents are furious, but are all too cowed by Tatts to do or say anything about it,” says newsagency blogger and industry spokesman Mark Fletcher. “They’re a tough business to deal with.”
The Lottoland campaign to discredit newsagents is working based on the claimed Lottoland numbers and sales data I have seen for plenty of newsagency businesses.,
Sunday newsagency marketing advice: 5 last minute Easter marketing tips
Easter is less than a week away, here are some simple marketing tips you could engage to try and find new shoppers for this season. Some are new, some are from by 2015 tips
- On Facebook give people reasons why Easter is a perfect time to send a card to a distant friend or loved-one. Sometimes people need to be told when to send a card.
- Last minute pitch. Have a small selection of Easter cards at the counter.
- Give rabbits a discount. Get people to dress up as a rabbit to get a good discount.
- Have an egg eating competition – who can eat the most in 30 seconds.
- Offer free fried eggs one or two mornings for a gold coin donation to a local charity.
- Make a giant papier-mâché egg with things you sell (old newspapers, coloured paper, paint). Go big, I mean really big. Taller than a person. Let the kids paint it. Make it a local thing for people to come see.
- Have an easter Egg hunt for over 70s. Egg hunts are usually for kids but those over 70 will have a different recollection of the season from when they were kids. Cater to them with a hunt in your shop for tasty eggs.
- Do good. Collect for something during the season. Given the animal themes, maybe a local animal shelter.
- Invite a wall of stories. If you have a wall available, cover it with paper and invite your customers to write or draw what Easter means to them. this makes the season more interactive.
- Give away eggs. Freely and with a smile! Contact Chocolate Gems, they have excellent counter packs of eggs you can buy in bulk. They taste delicious and make for ideal counter giveaways.
If you act in an average way for Easter expect average results.
Promoting pens outside of stationery
This stand pitching Pentel pens outside the stationery department is working a treat. It is connecting better with browsers rather than the pen placement usually in the stationery department that would work only for destination shoppers.
I am grateful to Pentel for their work not only on the stand but also for their engagement to help drive success of the stand. Dealing direct is a dream for these and other shop floor initiatives that drive shopper engagement.
Stationery news: GNS has a plan
Stationery News has run an interview with GNS CEO Paul Yardley.
Fairfax demands newsagents display newspaper posters
Fairfax is issuing letters to newsagents who do not display their newspaper posters inside and outside their businesses.
This from a company with a track record of taking money from advertisers for then placement of stickers over headlines and photos on page one of the newspaper.
Fairfax takes the advertiser money for their financial benefit.
Newsagents stop displaying newspapers for their financial benefit – there is no evidence that displaying newspaper posters increases sales.
The action by Fairfax of their heavy-handed approach could encourage targeted newsagents to reconsider selling Fairfax products. Maybe this is what Fairfax wants.
The letter from Fairfax to newsagents not displaying posters includes a claim newsagents are paid to display them:
The sales and service fees paid to newsagents includes a component of 8% for fulfilling these poster display requirements.
This is ridiculous. The real margin Fairfax has been paying for the sale of its newspapers have been declining year on year. Sure, the cover price has been increasing. However, declining sales and the declining margin in real terms is seeing newsagents worse off in a situation where rent, labour and other costs increase year on year.
When I heard about the latest breach letter I thought it may be an April 1 prank. Alas, no. Fairfax is serious. They do want newsagents to display newspaper posters, even without evidence that doing so benefits the newsagent, even if it is not financially viable.
The letter from Fairfax includes this guide:
It will be interesting to see how this plays out, whether Fairfax takes further action. The way the breach letter has been handled suggests they will. There was no consultation from what I understand, just the letter.
The letter reminds me of the bad days a couple of decades ago when newsagents were treated like naught school kids when they did anything outside of what newspapers publishers demanded.
Publishers need to understand they have a product of declining interest from which newsagents make little return, certainly not enough return for the grief, space and labour involved.
Do we need newspaper traffic in our businesses to survive? I don’t think so, certainly not if yours is a transformed or transforming business with net new traffic drivers that are delivering.
Newspapers are nowhere near as important today as they were ten years ago. Yes, there is news in the shingle – but as I have shown recently there are smart ways to repurpose that word.
I get why a newspaper publisher would think the posters are important. However, their double standards by them obscuring the masthead of front page tells us some in their company think news is less important.
This campaign by Fairfax will most likely only target direct account newsagents. If that is the case it further highlights the challenge for the company.
Wayne Cousins and colleagues at Fairfax should look more carefully at their approach. Newsagencies are closing – in part due to declining print media traffic. You can’t fix that by being a tougher cop. Lead by example, clean up your product, make it more compelling. Create products and marketing collateral newsagents engage with because they want to rather than because you waved your stick.
How large companies deal with small business
The Sydney Morning Herald had a terrific report Wednesday on how large companies deal with small business in the payment for goods and services.
The report is on the back of research by Kate Carnell,the Small business ombudsman.
“It’s pretty close to extortion really,” Carnell said. “Large multinational businesses’ payment terms have blown out considerably. They are now moving to have standard contractual payment times of up to 120 days. It’s really bad for midsize businesses and a shocker for the SME space. It will kill SMEs.”
We have all been there, waiting for payment from big business clients. The cost makes the business not worth it.
It is good see the Small business ombudsman engaged on this issue. More please.
Is Luke Brill, CEO of Lottoland, misleading in his offer to work with newsagents?
If we can find a way to co-operate with newsagents, we would be more than happy to do that. We’re happy to respond to things, we’re not hiding from anything.
This is quote from Luke Brill, CEO of Lottoland, as quoted at news.com.au today.
Lottoland has ignored correspondence from newsagents about mocking, attacking even, newsagents in their TV commercials. I have contacted Lottoland in Australia and overseas myself and they have not responded. Others tell me they have contacted Lottoland too. So I wonder if the Brill quote is misleading. Brill has not responded to me.
Click here for a PDF of the article – in case News puts it behind a paywall.
I don’t see a big issue with a Lottoland ticket being a bet nor do I see a big issue with them being online only as that is where the bulk of lottery products will be purchased in the future.
My issue is that they have deliberately targeted newsagents in their ad, they have misrepresented newsagents, mocked them and all in an effort to shift lottery purchases online. Tatts has stood by and let this happen without response.
The response I want from Lottoland is that they advertise their product without mocking or attacking family owned newsagencies, and that they apologise for the ads they have run.
The response I want from Tatts is they they support their retail network rather than ignore them. The Tatts inaction is a breach in my view.
Online is the big challenge facing newsagents today. This is why I think newsagents should challenge the capital expenditure demanded by Tatts for their new fits as the cost does not match future income prospects given changes in how people will purchase.
Q1 benchmark study under way
I am a couple of days into analysing data for the Q1 newsagency sales benchmark study comparing the performance in newsagencies from January through March 2017 with data from the same period in 2016.
While I expect this study will reveal a continuation of trends, it will also reveal new information, new opportunities.
It is terrific that many newsagents are keen to participate, keen for their data to bee part of the large dataset used in the analysis and to provide insights into the direction of revenue sources and business performance in our channel.
Here is part of the call for participation that I sent out announcing this new study.
Why a spinner is perfect for some card ranges in the newsagency
I could have also called this post why some card companies should not pressure newsagents to get on the wood or on the wall or however else they refer to permanent card fixtures.
I heard from a newsagent last week about a card company that currently has a spinner in their business pressuring for space on the wall. The rep from the card company said the wall was premium space and if the newsagent respected the relationship they would allocate wall space to the card company.
The spinner is performing well. Indeed, in terms of return on floor space, the spinner is in the top five performing floor space allocations in the business.
It does not make sense that the card company would want to disrupt a situation that is working for them and the retailer.
This same supplier agitates for wall space by saying the number of spinners is limited. I suspect they do this without considering the performance of spinners, without carefully analysing the performance of spinners.
Here are four bother reasons, beyond sales performance, why a spinner may be a better solution for cards than being on the wall:
- The card department primarily serves destination shoppers.
- Shoppers do purchase cards on impulse. For this to happen you need to be where they are and often that is not the card department.
- Some card ranges can attract shoppers to a business. They can only do that if on the lease line.
- Some card ranges add to the entertainment / shopping experience. This is best achieved outside the card department.
So, to any card company wanting to move their cards off a successful spinner onto the wall I’d say prove to me that this makes sense, protect me if it fails.
If your rep tells you sales will improve, call them on it, ask for evidence to support the claim. Too many reps are allowed to get away with BS. They have a job to do and that is to serve their employer. Often that relationship does not drive the best outcomes for your business.
Another embarrassing House of Wellness promotion
The House of Wellness giveaway with News Corp newspapers yesterday was embarrassing. People weren’t chasing it and plenty didn’t want it when offered. It is a sales catalogue for Chemist Warehouse dressed up as editorial content. We should be paid well to distribute this ad catalogue. We are not paid well in my opinion.
Sunday newsagency marketing tip: marketing is not about you
Small business retailers tend to like marketing they can see. Like the ad in the local paper or the catalogue in letterboxes.
You seeing your own marketing is irrelevant. In fact, it is as irrelevant as many catalogues stuffed in letterboxes.
The best marketing today is about accurate engagement measurement, faster delivery and more immediate in-store engagement.
Take the old-school catalogue . Artwork, printing and delivery will take three to six weeks and cost you or your marketing group around $1,500, maybe more.
In many locations, that $1,500 could have funded 30 Facebook campaigns reaching 5,000+ people, carefully targeted with accurate data on engagement.
While catalogues play a role, that role today is far less than two years ago.
A newsagent told me they liked the catalogue because they could see it whereas they could not see a Facebook post. Their loss, as I told them.
200th issue of Owner Builder magazine
If you stock Owner Builder magazine, dig out the latest issue and shine a light on it in your shop. It’s the 200th issue. I like the magazine as it is Australian, niche and loved by its readers.
Take a look at the preview the publisher offers vis this Tweet on Twitter:
Latest issue of The Owner Builder on sale nationwide now! Sample here: http://t.co/locLL1xot1
— Lynda Wilson, Editor (@theownerbuilder) July 29, 2015