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

Author: Mark Fletcher

Old signs

When suppliers give away signs and offer to install them, years later we can see why. This is a photo from a shop that has been empty for years. A key principle of marketing is to have your brand seen.

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Newspapers

Are Media to compete directly with gift and homewares retailers through Hard To Find acquisition

Are Media has announced its acquisition of the Hard To Find business. Hard to Find currently attracts 148,000 visitors (shoppers) a month. They dominate online for gifts:

The acquisition places Are media as a direct competitor of any retailer in the gift space, including newsagents.

While I get that Are Media needs to do what is best for its shareholders, they need to understand that this decision does make them our direct competitor. Anyone who says otherwise is ignorant. While the company has other e-commerce platforms, Hard To Find is on the mainstream online, it comes up in top search results.

Yes, I understand that it is a marketplace, driving traffic for other businesses that actually do the fulfilment. But, that is not how an online shopper sees they business. When they click add to basket, they are buying from Hard To Find.

Click here for the story from Mediaweek about the acquisition:

Are Media has announced the acquisition of Hard to Find.

The acquisition of the Australian e-commerce business significantly expands the media company’s existing content commerce capabilities, strengthens its revenue diversification strategy, and leverages Hard to Find’s market-leading technology to engage audiences even further with Are Media brands and content.

Hard to Find is an award-winning premium product marketplace, celebrating fun and innovative designs from the best small creative Australian businesses.

Founded in 2008 by former media executive Erica Stewart, the site brings an expertly-curated community of product designers and artisans together with discerning consumers looking for something different, creating a more personal maker-to-customer shopping experience.

Are Media CEO Jane Huxley said: “This acquisition adds new e-commerce capabilities to our broader business and allows us to amplify the success of Hard to Find, introducing audiences who are already inspired by our content and enticing them to take the relationship with trusted, authentic brands that one step further.

“I’m excited to welcome Hard to Find into the Are Media stable and particularly pleased that Eri will be joining our business to continue to lead the evolution of Hard to Find. She brings a wealth of experience and proven success in e-commerce that will help drive our future ambitions in content commerce.”

Hard to Find joins Are Media’s established and category-leading digital brand communities, including beautyheaven, trusted by 96% of its audience, and Bounty Parents, supporting parents and parents-to-be for more than 35 years.

What frustrates me about this is that Are Media splashes cash on this acquisition while refusing to make meaningful progress on poor commercial arrangements with newsagents for its magazines:

  • The paltry 25% commission paid for the sale of their titles.
  • That newsagents have to fund theft of magazines in-store while supermarkets do not.
  • That newsagents have to pay to receive electronic invoices for products while in almost all other retail sectors electronic invoices are free.
  • That labour management processes for magazines are rooted in the 1980s, and cost newsagents hours, disadvantaging them.
  • That newsagents lose hours chasing delivery shortages through a system that presumes guilt until call or email 3 or 4.

And, now, we can add that Are Media owns a business that directly competes with us for gift related sales.

Final word: if you think I’m saying they should not have acquired the business … I am not saying that. rather, I want Are Media management to be more respectful of newsagents and this acquisition story is an opportunity to make this point.

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magazines

Some photos from the newsagency from 12+ years ago

Unfortunately, newsagents are still encouraged to create magazine displays to chase a cash prize, and supermarkets are still paid for premium shop floor placement.

It’s tactical placement that drives impulse purchases of a magazine. Af for traffic generation, displays pitching special interest or niche titles provide more value than displays for mass weeklies or monthlies.

–

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magazines

Pitching magazine range on social media

It took me 5 or so minutes to make this social media post. It has worked a treat not only attracting social media engagement, but, in-store too.

There is no doubt we get more traction from promoting special interest titles than high volume weeklies and monthlies.

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magazines

Why are your EFTPOS merchant fees rising?

It’s an easy complaint to make – my merchant fees are going up, it’s not fair, time for me to consider another supplier.

Okay, yeah, that’s an easy take. It’s a cheap shot by me to call it out. But, let me explain and explore it with you.

My advice is to look at your data first.

I’ve looked at hundreds of thousands of baskets from many retail businesses.

The most common reason merchant fees are increasing is because of more sales transacted using EFTPOS.

While sometimes the actual fee basis, flat fee per Tx or percentage, increases, this is rare.

Yes, the most common reason a retailer paid more in merchant fees last month than the month before is because more transactions were paid for on a card.

So, the EFTPOS provider is not the cause of the issue.

Newsagents in some marketing groups have access to preferential rates that see them paying the lowest fees in the country.

But, that addresses only the base cost.

To address the growing cost to the business, of people using a card to pay, you need to be an engaged retailer. Here are some ideas:

  • Promote cash payment – if you want the costs associated with cash of course.
  • Be clear as to the cost of using a card. You could apply a surcharge, which I think is a ridiculous idea though.
  • Price knowing that cards will be used. Build the cost into your pricing model. Keep the bump under 2% and it is less likely to be noticed.
  • Lower a cost elsewhere to cover the cost. Look at your labour cost, for example. Shaving a hour of employee rostered time can save you around $30.00, that’s equal to purchases of $3750.00 on a card – depending on the type of card used.
  • Increase sales. While you should be single-mindedly focussed on this anyway, increasing sales helps you address the EFTPOS cost and more in the business.

It’s easy to kick a bank over EFTPOS fees. But … before you do that, look at your own behaviour. Here are common points in retail businesses that retailers overlook when they kick a supplier:

  • Dead stock. It’s easy to identity but often not. A problem not seen is not a problem to some. In my experience on conducting an audit of stock performance, usually, 20% of stock on the shop floor over which the retailer has full control underperforms and should not be there.
  • Bloated roster. Some prefer to spend money on people so they have time to themselves for relaxing, golf or to sit in the back office, where no customer purchases from.
  • Wrong trading hours. Some stay open too long while others are not open long enough. Either way has a cost to the business.
  • Being blind to theft. Theft in retail, like a local newsagency business, costs on average between 3% and 5% of turnover. Not watching for it, tracking it and mitigating against it has a cost to the business.
  • The wrong product mix. GP% is a key measure of retail business performance. Increasing yours beyond what is traditional for your channel provides you with a buffer. For example, transaction count / sales can decline and you can be okay. Measure GP%. Set a goal. Chase it. The air is cleaner in above average.
  • Ignorance. It’s not bliss. It’s not! There are insights in your software that can guide better decisions, faster decisions, more financially rewarding decisions. Yet, too many in retail don’t want to know. That failure costs them plenty.

The 6 items on the above list are all on the retailer to address.

I get that it’s easy to complain about high EFTPOS fees. If you are contemplating that, please take a moment to look back inside your business, look at the reason why and see if there are decisions you could make that are more valuable than complaining about EFTPOS fees or changing supplier. I’d be happy to help.

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Newsagency challenges

Tabcorp reaches out to flood impacted retailers

Management at Tabcortp’s TheLott sent this to retailers:

Dear Retailer,

 

The past few days has been very unsettling and difficult, with the recent floods causing significant damage and disruption to our local communities and businesses.

To help retailers who are impacted, the Queensland and Federal Government has activated assistance for affected individuals and businesses. I encourage you to review the information below to see what emergency assistance you may be eligible for.

Disaster assistance for individuals

Australian Government Disaster Recovery Payment This is a lump-sum payment of $1,000 per adult and $400 per child if you are eligible.

 

At this stage, the Local Government Areas of Gympie and North Burnett can make a claim until Friday 26 August 2022.

 

Please visit this dedicated website to find out more and how you can apply. Please continue to check this website regularly as we expect more Local Government Areas to be added to the eligibility list over the coming days.

 
Personal Hardship Financial Assistance This financial assistance has been activated for Queensland communities who have been impacted by the rainfall and flooding in the Local Government Areas of Gympie and North Burnett.

 

Please visit this dedicated website to find out more information, and please continue to check this page regularly as we expect more Local Government Areas will be added to the activation areas over the coming days.

 

 

Disaster assistance for businesses

Disaster Recovery Allowance (DRA) The DRA assists employees, small businesspersons, and farmers who experience a loss of income as a direct result of a major disaster.

 

You might be eligible for a maximum of 13 weeks’ payment from the date you have or will have a loss of income as a direct result of a disaster.

 

The DRA will be available to the affected Local Government Areas of Gympie and North Burnett, with further flood-affected Local Government Areas expected to be added in coming days, as the damage becomes clear.

 

If your business falls in these Local Government Areas and you have been impacted by the floods, we encourage you to phone the DRA on 180 22 66 or visit this dedicated website to find out more.

 

 

Further support and information

Community Recovery Hotline Please call this hotline on 1800 173 349 if you are experiencing emotional stress or require personal financial hardship from this event.
National Retail Association Government Grant support Please call the National Retail Association on 1800 573 322 or via email at policy@nra.net.au who has a dedicated team on standby to help navigate the Government Grants that you could potentially be eligible for, which may include disaster relief.

 

Please monitor the above websites regularly for any further changes as the situation evolves.

If your outlet has been impacted recently by flooding and you would like to discuss this further, please reach out to your Business Development Manager.

Take care and stay safe.

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Lotteries

Looking forward to OPIx 2022 in August

OPIx 2022 was announced today:

OPIx 2022 BRINGS THE OFFICE PRODUCTS INDUSTRY TOGETHER ON THE GOLD COAST!!

Tuesday, 1 March 2022

After 2 years apart, the independent office products suppliers, resellers and retailers will join together for the OPIx 2022 Industry Expo at The Star Gold Coast on Saturday 13th August 2022.

The Supplier Expo attracted over 400 delegates in 2019 to provide newsagents and independent dealers across the country access to a wide range of suppliers, new products and exclusive offers.  Inaugural partners Office Choice and GNS Wholesale are excited to announce an expanded partnership with the Newspower and newsXpress groups who will be supporting the event in attendance with their members.

The weekend event will consist of a full day industry expo with suppliers and delegates from Office Choice, Newspower newsXpress and GNS with an invitation extended to the broader independent sector.  Following the Industry Expo, the OPIx Gala Dinner & Awards night will reward the high achievers across Office Choice and GNS with the Office Choice Conference ensuring members get the most value out of their weekend.

OPIx2022 is proudly supported by Platinum sponsors ACCO Brands Australia, Opal Australian Paper and Furnx.

All Covid safety protocols will be followed in conjunction with event management to ensure a safe event for all participants.

Office Choice and GNS Wholesale launched the event in 2019 with the support of the industry, to promote the interests of the broader independent office products channel. It’s aim,with the participation of other industry groups, is the event will become the highlight of the annual industry calendar.

Office Choice, GNS Wholesale, Newspower and newsXpress are committed to working with all of our valued supply partners to ensure maximum value and return on investment for the supplier community. We look forward to your support as we continue to build a strong future for the independent business supplies resellers of Australia. This event is sure to be a highlight of the annual industry calendar.

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Stationery

Milkrun: a business to watch

Milkrun is an Aussie tech / retail startup that is worth watching. What they are doin g is what newsagents could have done back when they were transitioning from being local distributors. But, to be fair, the tech has come into its own and Covid … making Milkrun’s timing for now just right I suspect.

This 7 news story has details:

I mention it because of the comment about dark stores / dark retail – this is a retail situation not open to the public. Dark retail is something I have advocated newsagents have at the back of their shop for an online business, a side-hustle that can use shop infrastructure.

So while it’s too late to get into this Milkrun type of business offering local deliveries, there are aspects of what they have done and are doing that can inspire newsagents, like dark retail.

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retail

Local newsagents impacted by floods

The floods in Queensland and New South Wales are hitting hard with homes and shops under water.

The extent of the impact for many, especially those in business, will not be clear until they are permitted to return to their shops. All they can do for now is look on at the footage shot by drones.

Some already know from what they have seen that their shops will have to be gutted. Flooding like this does extraordinary damage, leaving little to be salvaged.

I know there are plenty of us in the channel, newsagents and suppliers alike, thinking of our colleagues facing tough times right now.

We have been watching this unfold since late last week. It is disappointing that it was not until today that some practical federal assistance was announced.

Hopefully, practical assistance will be more forthcoming than the promised bushfire relief funds announced two years ago and not delivered.

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Social responsibility

The window of the shop

For habit based shoppers, what you put in your front window will not be noticed by them, as they are more often than not destination shopping when them come to your shop.

This is why I suggest to retailers that they not pitch destination products in the front window or on the lease line. It doesn’t;t make sense to me to show off what you are known for.

I like to use a front window or a lease line display to pitch what I am not known for, to get people to notice or turn their head at least, and, maybe come in to check us out.

The more we can play against shopper expectations the better I think for the expectations attached to newsagency shops are rooted in history.

This display is from one of my shops from yesterday. It speaks to this desire to pitch what we are not known by most for. It speaks to a freshness and a warmth if you will outside of what may be associated with shopper assumptions re a newsagency.

The mix of colours, textures, product categories and gifting occasions pitches a diversity that we think will help us attract people who might otherwise have passed the shop by. We are really happy with the mix. Quite proud actually.

This approach to outside traditional newsagency category pitching at the front of the business is easier for us given that we don’t have lottery products. While we are asked daily (ugh!) by people who tend to not look around themselves, we are getting more people asking about gifts they’d like to give.

This display at the front of the shop will remain in this form for no more than two weeks. Then, it will start to evolve. depending on new sales and new inventory availability it may be completely replaced at that time.

Let me leave you with some sales benchmark guidance. Plenty of newsagents are doing gift revenue of two and three times their card revenue, some even more. Those doing less than their card revenue have excellent opportunity for growth and that is the key point I’d make as there are many Newsagency businesses with that opportunity on the table.

Oh, and one final point. To show what I mean by being on the lease line, look at this image as through it you can see the Coles supermarket that is opposite us.

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Management tip

Major lottery news out of Victoria

Tabcorp and Lottoland have been given 20 year licences to sell keno online. Yes, that Lottoland!

Here is the government press release:

23rd Feb 2022

Tabcorp And Lottoland Awarded Victoria’s Keno Licences

Minister for Consumer Affairs, Gaming and Liquor Regulation Melissa Horne today announced Victoria’s Keno licences have been granted to Tabcorp and Lottoland after a competitive tender process.

The two licensees will be able to provide Keno online for the first time, as well as through traditional retail outlets, backed by harm minimisation and consumer protection measures.

The two-licence model provides consumers with a greater choice and is better for business. It allows distributor venues to benefit from competition and innovation as it removes a one licensee monopoly on the market.

Tabcorp and Lottoland will both be authorised to conduct and distribute the game of Keno in eligible hotels, clubs, wagering outlets and electronically throughout Victoria.

Stronger harm minimisation and consumer protection measures will also be introduced to help promote responsible gambling for those who choose to play Keno in Victoria.

These measures come after the Government conducted a robust review into the future of Keno in Victoria, consulting with industry, community and government stakeholders.

Under the changes, the Minister for Consumer Affairs, Gaming and Liquor Regulation can issue harm minimisation directions to both Victorian and interstate Keno game providers when providing Keno to people in Victoria.

The directions will focus on key areas such as incentives, direct marketing, account closure, deposit limits, activity statements, responsible gambling messaging and maximum draw frequency.

Harm minimisation directions will be based on the National Consumer Protection Framework (NCPF) for online wagering, with additional elements to support online Keno specifically.

Applications for the new licences were assessed against a number of criteria, including corporate and individual probity, as well as the economic benefits to the state.

The 20-year licence will commence on 15 April 2022 after the current licence, awarded to Tabcorp in 2012, expires.

Quotes attributable to Minister for Consumer Affairs, Gaming and Liquor Regulation Melissa Horne

“The industry has changed significantly since 2012, with new technologies and new online market entrants, so we have updated the Keno licence to allow for a more modern approach.”

“These changes will benefit businesses, while also ensuring stronger harm minimisation and consumer protection measures are in place so those who play Keno in Victoria can gamble responsibly.”

Hmm, I’m not sure how the changes benefit current lottery retailers.

Lottery Daily has their take on this:

Tabcorp and Lottoland have been awarded dual 20-year licences to offer Keno games in the Australian state of Victoria.

The new licences, which take effect from 15 April 2022 and run to 2042, are a return to the pre-2012 structure of two authorised operators in the Australian state, before Tabcorp’s 10-year exclusivity.

While Tabcorp’s current licence only covers retail, the new agreement also stretches to cover digital services after the company paid an up-front fee of $25m.

Sue van der Merwe, Managing Director of Lotteries & Keno at Tabcorp, commented: “Tabcorp is pleased to continue its partnership with the Victorian Government, with the longer term and expanded channel flexibility offered under this licence.

“The new structure will allow us to continue offering Victorian players a world class Keno product and responsibly grow the game further, backed by our extensive retail and brand presence and the expertise gained from our existing Keno online business.”

Lottoland also shared its enthusiasm over the deal as it announced its online platform KenoGo is gearing up for launch.

Nigel Birrell, CEO of Lottoland, added: “We are thrilled to have been granted a Keno licence by the Victoria State Government and look forward to launching KenoGo in 2022.

“I would like to personally thank the Minister for Gaming and Liquor Regulation, Melissa Horne, and the Victorian State Government for awarding the first dual licence in Australia.

“Most importantly, this licence means that consumers in Victoria will be able to enjoy Keno online on their smartphone or computer for the first time ever, with new gaming experiences and greater choice through Lottoland.”

The move to award dual licences follows the Victorian government’s Keno Licence Review and subsequent invitation to apply for a Keno licence process.

My view is there is no upside trend for over the counter lo9ttery purchases. yes, I understand big jackpots, l like tonight’s $120M Powerball will spike traffic, but not as much as they used to … because … online.

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Lotteries

The failure of Are Direct to get magazines to retail newsagents on time costs newsagents money

It’s Thursday morning. We have had our two magazine arrival staff members at the shop since 6am, waiting. Then, an hour and a half later, we get notified.

For years, Gotch managed pitched excuses, reasons why magazine distribution was challenges. Then, it was Ovato making similar pitches – the name change achieved nothing. Now, under new owners, well, here we are … waiting for magazines.

It’s a one-way relationship, and here’s why I say that. Their starting position when a newsagent reports short supply is that they do not believe you. It can take 3 ro 4 contacts to progress a claim. But, sometimes, you’re not successful,. even though know the magazines were not delivered.

One of my shops, one I bought just before Christmas 2021, does $380,000 a year in magazine sales. The distribution mess in Melbourne overseen by Are Direct is commercially harmful. Publishers should be screaming at them.

Footnote: I appreciate not everyone is impacted by this. Right now, it appears to be Melbourne focussed.

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magazine distribution

Extraordinary sales growth for Amazon Australia

57% year on year growth achieved by Amazon.

Amazon has become one of the leading online marketplace in Australia in just four short years, zooming ahead of rivals such as Catch and Kogan during the COVID-19 lockdowns.

Amazon’s sales revenue hit A$1.75 billion in 2021, due to its “the everything store” status, coupled with a hefty streaming offering through Amazon Prime. In 2020, revenue more than doubled to reach A$1.12 billion.

Amazon.com.au, the online store portion of Amazon’s local business, generated sales of $883 million in 2021, a huge leap from 2020’s $517 million.

Amazon Prime memberships accounted for $155 million, and is a fast-growing arm of the local Amazon enterprise. In 2019, the nascent streaming service made just $35.4 million in Australia.

“Revenue from related parties”, which accounts for royalties from Aussie shoppers buying via international arms of the Amazon store, reached $471 million, up from $371 million.

Now, if only they paid a decent amount of tax.

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Competition

AGHA Sydney gift fair “a waste of time”

Several retailers I have spoken with told me the Sydney AGHA gift fair held this past weekend was a waste of time. It appeared challenged to me when I realised that a chunk of suppliers in the fair directory were not attending.

For interstate travellers, retailers and suppliers, I suspect there is plenty of frustration at the costs involved.

More attention needs to be paid to transparency around faders as we come out of the Covid lockdowns. If there are more experiences like AGHA retailers and suppliers will be wary and that benefits no one.

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retail

Remembering the comic magazine segment

Conics were an awesome magazine segment back in the day, a perfect habit based product that brought shoppers back and back. While we still have some comics today, sadly, not enough for what remains a passion for plenty. Check out this as from years ago:

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magazines

Playing outside traditional retail seasons is vital to growth in retail newsagencies

Blue ocean strategy is all about positioning your business in clean and clear waters with less competition. Red ocean is where most are, it’s crowded and bloody.

Major seasons like Valentine’s Day are red ocean. Crowded. Competitive.

At the newsXpress newsagency marketing group business we love creating blue ocean opportunities for our members. Here is a short video from me, which I shot Thursday last week, in which I talk about blue ocean opportunities in 2022 for newsxpress members.

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newsagency marketing

Going out early with Easter is important for newsagents

The Toyworld a couple of doors away from our newsagency has has had cheap $1 and $2 Easter cards on the lease line for several days. I can’t recall them pitching the Easter season two months out before, but here we are.

Thankfully, we had our stock so we could adjust plans and go out early, which we have done, and, yes, people are shopping the season early.

Right now, the focus is on cards. we will add gifts as they arrive, to tell a more complete seasonal story.

The card pitch today for us is all about friends connecting, using Easter as an opportunity to send a greeting or I’m thinking of you message to a friend, using an Easter card.

While Easter is a smaller card season, it is valuable, and growing. We don’t engaged with the $1 and $2 cards as we see that as a mugs game. Price based shoppers are not loyal.

What we are seeing this year, as with every year for Easter quite frankly, is that religious cards sell best early in the season.

We encourage this through gentle social media posts and tactical placement of these cards within the broader Easter card offer. It is not uncommon for this shopper to purchase several religious Easter cards at once. Since we have a good range of general religious cards in-store, we are able to cater to this shopper beyond the Easter season. It’s important that we try and make that connection.

My tip for newsagents: if you have Easter cards and they are not already out, get them out if you have the space. There are other retailers, like Toyworld, in this space and possibly taking sales you might have otherwise got.

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Greeting Cards

Leveraging the loyalty differentiator in the newsagency

Shopper loyalty has become a maze of hoops, often with little real value at the end for shoppers, and retailers. Almost 9 years ago to the day my newsagency software company launched a new approach to loyalty. Yesterday, I shot this short video in which I talk about what continues to be a differentiating approach to loyalty. I know of hundreds of newsagents using this, and hundreds of other retailers.

Sure the video promotes my software company. It also encourages you to look at what you do in the loyalty space and to question whether what you do values shoppers and differentiate your business.

This simple approach to loyalty is easily understood and this helps people engage with it sooner, even those who make a one time only visit to the shop.

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Leadership

Retailers keen for OzLotto changes

The SA Government recently gazetted changes to the state’s Lotteries Act and through that offered.May 11, 2022 as the date from which changes to OzLotto will apply.

7 numbers from 47 are drawn and three supps.

The changes are expected to reinvigorate interest in OZLotto through an increase the jackpot opportunity, which plenty of retailers love.

For retailers reliant of lottery products, the changes are good news.

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Lotteries
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