While politicians have patted themselves on their backs for ‘fixing’ the Lottoland betting model, Lottoland is still in business as this Super Bowl promotional email shows. This must be frustrating to lottery retailers given how Lottoland mocked them in their TV commercials.
I can’t help but think this issue would have been resolved had all newsagent associations followed the ALNA strategy that led to the initial legislation being passed.
Few suppliers at the Melbourne Gift Fair talked about the impact on the supply chain of the Coronavirus when, in reality, the impact is already being felt with factories in China remaining closed for two weeks longer than at this New Year time of the year.
There is talk that the Chinese government may extend the restart following Chinese New Year for a third time. The impact is not only the finished goods factories but also those making components for them.
Once the factories do start, there will be logistical challenges with freight capacity finite.
Beyond the factory closures, there will be other impacts as governments deal with broader aspects of the virus. At borders, for example, there is discussion of new checks – based on what gift and related importers I deal with are saying.
I am also aware that major tech companies have announced hardware supply delays as a result of the impact of the virus on production plans.
Kudos to suppliers being transparent about the impact. Shame on any talking preorders and prepayments (or deposits) for product that will be impacted.
Retailers relying on locally made products will be less impacted.
The experience in the physical retail store matters more today than ever before thanks to smarter and more engaging online experiences. By experience, I mean more than professional service with a smile, accurate transacting and a neat and stoppable store layout.
The experience that matters today is what your store offers that is so interesting and memorable that people will tell others.
With some newsXpress colleagues I visited several interesting stores in Atlanta and New York when in the US for the Atlanta Gift Fair buying for newsXpress. Here is a 30 minute video of some of the stores we visited that we found interesting. There were others, and more insights too. This video reflects highlights.
The video is another example of one for of the many insights newsXpress offers its members – not suggesting they copy these retailers but, rather, to be aware of how retail is evolving in a range of specialty niches.
Saturdays used to be big in retail newsagencies, back when there were fewer lottery draws, little or no Sunday trading and less late night shopping. We need to refresh Saturdays if the day is to be commercially valuable. Here are some suggestions:
What ever you do it has to be about your business as it is the commercial outcomes you are looking for. I mention this so you can focus on what you need rather than what a local group may need / want ahead of you.
The headline, Chinese virus pandamonium (sic) on the front page of the Herald Sun yesterday was, in my opinion, racist and unnecessary.
I wish I had been at the shop because had I been and had I seen this I would not have put the newspaper out for sale.
Yes, I get that such a move is editorial in itself. However, in my shop I get to choose what I sell. This issue of the Herald Sun is not something I’d want to knowingly sell.
Back in mid 1996, a few months after I bought my first newsagency, we made the decision to stop selling cigarettes. We turned err back soon $2,000+ a week in retail sales. This was a decision based on what we felt was right for the business, for what it represented. It was the right decision.
Click here for more on this from Mumbrella, which was also the source of the image.
Footnote: now, before people say this is News Corp. bashing. I don’t care. I did not decide to run the headline in the Herald Sun. What I did do is label it racist. However, I think any reasonable person would reach this conclusion. News Corp. needs to be responsible for these race based and shrill editorial decisions.
More and more newsagents are being referenced on social media and it’s not always how we might like.
Where does all the hatred come from? Well, pop down to your newsagents and you can buy hatred on a daily basis.
My article for @BylineTimes on the fake news and project fear of our right-wing tabloid media to whip up hatred and xenophobia.https://t.co/VEXlo7i1ko
— James Melville (@JamesMelville) January 29, 2020
My local newsagents don't sell newspapers anymore cos it's space better served to stock proper toilet paper
— PoPanda (@DavePw5) January 30, 2020
The Windows 7 operating system, from Microsoft is about to go unsupported.
What this means is that Microsoft will no longer develop and release updates for Windows 7, putting the users of this operating system at a security risk. There is an industry in the shadows filled with people who seek to exploit security flaws. The security flaws that work best for them are those for which patches are not released – like Windows 7 soon.
If you are running a computer with Windows 7, the best practice advice is that you upgrade your operating system as a matter of urgency.
If you think your insurance will cover you for the costs of recovery, it may not if you have ignored advice to take reasonable steps to protect your business data.
Nine newspapers ran an opinion piece, The joy of jigsaws, and why you should start them in your 20s, Tuesday. It was a terrific read.
Regulars here would know that I think jigsaws are a good fit for evolving newsagency businesses. Some may recall that newsxpress has been running a successful January is jigsaw month promotion for five years now. It continues to run because it is commercially successful.
The Nine opinion piece reinforces the health value of jigsaws.
Jigsaws can be effective stress relievers (assuming there are no pieces missing) but the range of health benefits to be gleaned from tackling the tiles can be far wider. The simple genius of the jigsaw is that it works both sides of the brain, analytical and creative, and also stimulates the production of both acetylcholine, crucial when you need to pay attention, and dopamine, the chemical that plays a key part not just in memory but the sense of feeling rewarded, too.
As you move into your 40s, the number of neurotransmitters in the brain begins to decline and while that doesn’t really alter the brain’s storage capacity, it does affect our ability to retrieve and process information.
This makes them a good gift a good purchase for oneself and a good product to have open for in-store engagement and use.
What I like about jigsaws is their efficiency as a product. What I mean by efficiency is…
There are few product categories that are as diverse in their appeal as jigsaws. It’s why I have a permanent department of jigsaws in my shops and why they are regularly promoted front of store as well as on social media. They are an all year round gift opportunity, delivering a good return on space, labour and inventory investment.
From a newsXpress perspective, members are provided detailed strategic information they can use to successfully engage with the category. One insight from this that I will share here is – crossword shoppers are more likely to buy jigsaws and the crossword magazine segment is a key piece of good news in magazine sales based on the latest benchmark data.
As a result of single incident, decades-long newspaper delivery practices in there Sunshine Coast region have been uprooted with delivery drivers being told they cannot enter premises and drop bundles. At a few hours notice newsagents were told to organise locked boxes on the street or to be present for the 2asm (or thereabouts) delivery from tomorrow morning.
Nuts.
While the coronavirus situation in Australia is serious, it is not at a level where the government has issued specific operational advice for businesses such as retail. Click here for their current advice. Fears relating to the virus are being expressed in shops and retailers have wondered how they might respond.
Retailers can take some steps to encourage confidence in those entering the business.
While this list may seem like an over reaction, it is better to be prepared and proactive than needing to be reactive.
The Coronavirus is not something to seek to profit from.
Stay focussed on what your business is known for.
I first shared this idea seven years ago. It is even more relevant today given this bushfire season.
Embrace the love theme of Valentine’s Day but focus on your community. Cut out hundreds of hearts and ask your customers to write what they love about your town / community.
Put the hearts on show – so people can read the messages. Create a display in or on your window or create a tree-shaped frame onto which the hearts can be placed as leaves.
The completed tree or display, hopefully overflowing with heart-shapes with notes of what people love about their community becomes an inspiration for you and everyone who participated and looks at the finished art.
Let your council, chamber of commerce, community groups and schools know. Maybe invite a gold coin donation for each heart for a local charity. Let the local paper know as this is the type of local community story they should love.
There is no commercial goal here. No, this is a marketing idea designed solely to deepen the connection between your business and the local community.
The Australian today has the story from Leo Shanahan about Bauer Media asking the ACCC to approve the PacMags acquisition.
Bauer Media boss urges ACCC to permit merger with Pacific
Bauer Media’s Australian boss has pleaded with the ACCC to allow the takeover of Seven’s Pacific Magazines in the interest of the struggling industry, pointing to growing unregulated online competition backed by the findings of the watchdog’s own digital platforms inquiry.The call by Bauer ANZ chief executive Brendon Hill comes in a week that The Australian revealed the German-based media conglomerate lost a private equity suitor after Mercury Capital pulled out of a reported $150m offer to buy the Australian arm of Bauer Media. The buyout would have proceeded only had the Pacific deal gone ahead, but last year the competition watchdog released a discussionpaper outlining several possible barriers to the $40m merger, voicing concerns over possible price rises and declining quality of the titles.
Although the ACCC statement of issues recognised online competition as an issue, Mr Hill said he was dismayed the watchdog viewed competition between Woman’s Day, New Idea, That’s Life and Take 5 as “the market”, given it recently completed a landmark review into the effect of digital platforms of traditional media.
At an industry function last year, just after the proposed acquisition was announced, the CEO of Bauer announced to those attending that no magazine titles would be closed as a result of the acquisition.
I don’t see any public benefit in the ACCC blocking the proposed transaction.
From a newsagent perspective, magazines are not as critical to our future as they were, say, ten years ago and their relevance is fading. They continue toe as important but are no longer critical to the success of many in the channel. This is why I say, from a newsagent perspective, there is no reason to block the acquisition.
I think changes like single day delivery and greater focus on mass retailers like supermarkets (to the detriment of newsagents) will come regardless of the proposed acquisition. I say this considering that supermarkets pay for magazines they sell and not net sales based one sale or return. Newsagents would benefit from such an arrangement. Instead, we have to live with sale or return and ourselves carry the cost of shrinkage. This advantages supermarkets – hence my concerns about an even stronger relationship with them.
We made the decision to not open today. Historically in many major shopping centres, like where my own shops are located, the Australia Day public holiday is soft, break even at best as people embrace the last holiday before the school year starts.
Since we don’t have the obligation of lotteries we decided to not open. While we have magazines and papers in 2 of my stores, the sales and margin are not sufficient to support the penalty rate cost.
2020 is set to be an exciting year and having a day off like today at the start of the year is beneficial in terms of energy. It is also useful focussing on profitable days as they are far more useful than break even days.
Apropos of nothing, I tried these Lamington chips today. They are disgusting. They are a perfect example of a product the world did not need and would be better off without. However, there must be enough interested for Smith’s to invest in creation and production. FYI I like potato chips. These, however, are truly awful.
On Wednesday I shared this video about developments in the Amazon Go counter less, cashless, staffless conveyance retail model. Since sharing, several newsagents have contacted me with questions they did want to put their name to here. I agreed to note them and respond. Scroll down…
What is the estimated cost of the technology per store? My rough guess is around $500K, maybe more but not likely to be less at the moment. The cost will fall.
Do you expect to see this in Australia? Yes. I’d be surprised if operators like Coles and Woolworths are not advanced in planning.
If so, when? This year. If not, 2021.
Is this something an individual retailer could do? It’s not practical on a single store level given the role of data and the benefit of sharing labour cost across multiple close proximity stores.
If not, is there an alternative lower labour cost model we could work on? Yes. This required tighter management of inventory mix. That means less stock. Smaller retail space. A store that is focussed on convenience and not only convenience for part of the shop. It requires configuring the business for speed of shop and speed of transaction – not for part of it but all of it.
Where do newsagents fit in this? In the current c-store space in Australia, not that well because those in the space tend to struggle with letting go of being newsagents at their core.
What is your software company doing in this convenience space? I’ll announce more on that at another time.
In a further challenge to the Papyrus card brand, even though that falls under different ownership, the owner of the Papyrus greeting card shops in the US filed for bankruptcy over night.
Schurman Fine Papers files for protection from creditors, listing assets of as much as $50 million and liabilities of as much as $100 million.
Company affiliates include Papyruschain of stationary stores
Also operates or holds rights to the NIQUEA.D, Paper Destiny, Carlton Cards and American Greetings retail brands, per website
- Schurman has said it will close all of its Papyrus stores, Retail Dive reportedlast week
The case is Schurman Fine Papers, 20-10135, U.S. Bankruptcy Court District of Delaware
As I mentioned here a week or so ago, it is important we are transparent about funds raised in the name of bushfire relief and recovery. We made our donation a two days ago and shared the receipt on social media and in the shop. We chose the Red Cross because they are non denominational and non political.
The social media post itself is simple and appreciative. We followed the same approach with the Black Saturday fire fundraising. Customers appreciated it.
Footnote: Our only frustration is the news Wednesday afternoon that they will bank some donated funds for future disasters. I expect they will be under pressure to review this decision – I have certainly contacted them about this.
Papyrus announced yesterday that it was closing all of its 260 US stores. Retail Dive has the story.
In a letter to employees, Dominique Schurman, COO of Schurman Retail Group, which owns Papyrus stores, said the company would close its doors. The company has hired liquidation firm Gordon Brothers to assist with the going-out-of-business sales, according to the letter, viewed by Retail Dive.
…
The company acquired the American Greetings and Carlton retail banners from American Greetings Corporation for $6 million plus equity in 2009. As part of the deal, Schurman sold its wholesale business to American Greetings. American Greetings Corporation — which last year was acquired by private equity firm Clayton, Dubilier & Rice — today makes Papyrus and the other brands that fill Schurman’s retail stores.
There is no coverage in press reports so far about what the move may mean, if anything, for the Papyrus card brand. That said, the store closure move will impact the card brand.
Yesterday, The Australian reported that a proposed sale of Bauer Media has fallen through. Before it was put behind a paywall, I accessed the article:
Magazine issues ‘scupper Bauer Media sale’
Private equity firm Mercury Capital is understood to have walked away from its plan to buy Bauer Media.The decision comes after the competition regulator stymied local magazine consolidation last month.
People familiar situation told The Australian on Wednesday that Mercury is no longer pursuing the deal, although it is unclear what the Australian Competition & Consumer Commission’s part has played in the decision.
Last month, the ACCC raised concerns over Bauer’s proposed $40m acquisition of Seven West Media’s Pacific Magazines business, saying it could expose readers to higher prices or lower quality magazines.
The landmark deal to combine Australia’s largest magazine publishers would see competing titles Woman’s Day and New Idea, as well as Take Five and That’s Life, come under the same roof.
The ACCC’s concerns came on the same day that Seven West’s $64m takeover of Prime Media failed because of resistance from the regional TV broadcasters major shareholders, rival regional media players Antony Catalano and Bruce Gordon.
In a bid to salvage something from the deal, Kerry Stokes-controlled Seven West acquired a 14.9 per cent stake in affiliate partner Prime on the same day, December 19.
This follows a report in the Australian Financial Review from November
Private equity suitor likes the look of Bauer Media’s magazines
The surprise bid comes only three weeks after Bauer signed a $40 million deal to merge its local arm with long-time rival Pacific Magazines, owned by Seven West Media.Private equity firm Mercury Capital is in advanced talks to buy Bauer Media’s Australian and New Zealand publishing business, which is home to magazines including The Australian Women’s Weekly and was once the backbone of the Packer family’s Australian Consolidated Press.
Street Talk can reveal Mercury Capital is seeking to win Bauer Media’s approval with a $150 million offer, which would end the German media company’s difficult seven-year stint in Australian publishing.
The surprise bid comes only three weeks after Bauer signed a $40 million deal to merge its local arm with long-time rival Pacific Magazines, owned by Seven West Media, in an effort to shore up its future. That deal is scheduled to complete before the end of this year.
Mercury Capital’s offer would value Bauer Media’s publishing business at about six-times annual earnings of $25 million, with the synergies expected to be “material”, lender sources told Street Talk.
Click on the link above for the full story.
With supermarkets and discount variety stores offering cheap imported products – green and gold flags, stubby holders and similar – we are taking a more cerebral approach of celebrating the day with simple collateral that is not jingoistic.
For years, we copied with green and gold but no more. It’s a mugs game.
We have gone for this simple and celebratory message to counter the challenges of recent weeks.
We’ve all seen the headlines, because news outlets tend to like the drama of retail closures and challenges. Terms like retail apocalypse and retail armageddon have appeared in stories in recent weeks on the back of a series of challenging news about retail.
News outlets are quick to run stories forecasting doom and gloom. Often, the stories skate close to the surface without much analysis as to the reasons for closures. This bothers me as understanding the details can be helpful for context, and for mental health for those in retail.
Here are some of the stories from this year with notes from me offering context:
Harris Scarfe is closing 21 stores. They have been in trouble before. It is a second tier department store with modest critical mass. It found it hard to be competitive in a marketplace;axe that does not favour depatrment stores. I think their problems are due to department stores overall being in trouble and that they are a small group and therefore less able to weather changing times.
EB Games is closing 19 stores as a first step in an international review of physical store retail. I expect there will be more closures. There has been a fundamental shift in how games are sold. {physical stores are not as important as they used to be.
Bardot is closing 58 stores. This is a fashion brand that has not maintained relevance.
Curious Planet is planning on closing 63 stores. Ever since they list the Australian geographic branding the future has been in doubt.
Jeanswest is in administration and is reportedly likely to close 146 stores. Jeanswest sells discount jeans. The biggest group of jeans consumers are looking for more engaged brands than Jeanswest offers. Their differentiation was minimal. They as a business had not kept with the times.
Bose is closing 119 stores. They have figured out the commercial benefits of direct online engagement. Offering a 30 day no questions asked money back guarantee and costing shipping and other challenges, the company will make more money by closing 199 stores (leases, labour etc) and investing some of that into stronger online marketing.
The Bose move is what we should expect to see more of from international brands consumers trust. They will make more from direct relationships. We have plenty more to discuss in this topic is people are interested.
Rather than being drawn to the doom and gloom, which is a natural human response on reading reports like these, our time and energy is better spent on ensuring our retail businesses are relevant today.
How do we do that?
Yeah, it is the million dollar question … for which there is no one size fits all answer for every situation.
Here are some tips that I do know work:
Be the boss. It’s your business. You choose what you sell, who works there, how the business looks and how the business is marketed. Make those decisions like you are in charge.
Be relevant to today’s shopper. It’s likely the shopper is not like you. Too many stores stock what the owners and staff like. That is not a model for the future.
Be different. The more your shop looks like others the less it will stand out.
Provide solutions. It is much harder to convince someone to buy something they do not need, do not like, do not want or do not understand. It is much easier to get them to buy what they like, want, need or understand.
Embrace change. Know that what works today will be different tomorrow.
Treat data as cash. Small business retailers are notoriously bad at managing data. This leads to poor business decisions, which put businesses at risk. Treat data as a valuable asset and make better decisions as a result.
Sure there is tough news out there about retail. There is plenty of good news too.
Homewares are proving to be a good fit in the transforming newsagency, from small single items to large sets to furniture. Given that we are known for homewares related magazines, taking the extra step with products is a natural move.
The challenge is in sourcing products with K-Mart and others dominating the ‘value’ proposition, differentiation is essential – to make comparison harder.
I know of several newsagencies where more than 50% of their floorspace is now homewares. With GP at 50% and above for most sales, it is a valuable category, one worth investing in.
