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

Author: Mark Fletcher

Newspaper front page cover-up

2019 has seen a significant increase in replacement of the entire front page of some newspapers in Australia with ads. What used to be a rare replacement of front page news with a full wrap-around is more common now in my experience. While we will never know, I’d love to know the impact on sales.

On Saturdays years ago, customers would empty the papers of their catalogues and flyers. I have seen customers recently remove the ad wraparound and leave it at the counter or, worse, throw it on the ground in the street.

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Newspapers

Mother’s Day day is here

As is often the case with Mother’s Day and Father’s Day, the real success of the day for many retailers is the Saturday before. Today is that day.

Good luck everyone. I hope the day is a terrific success for the business.

Today, as through the season, we have gifts and cards in several locations, to connect with the different destination shoppers we serve.

We have very little in the way of Mother’s Day specific gifts. In fact, that’s been our approach for years. We think mums are tired of cupboards of Best Mum Ever mugs.

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newsagency marketing

News Corp and tax

The AFR today has a story some may find interesting.

Is News Corp still paying zero tax?

News Corp did a little tax engineering just days before the election campaign started.

It’s always inspiring to see someone backing themselves, and Rupert Murdoch is putting his money where his mouth is when it comes to News Corp Australia.

On March 29 News Corp US ponied up $178 million to invest as new shares in News Australia Holdings. Apparently the $4.3 billion of existing capital was completely inadequate.

….

So how much tax does News Corp Australia pay?

Looking at cashflow, in 2018 NAH made $162 million in cash payments for tax. But that includes REA Group, its 61.6 per cent subsidiary, which paid three-quarters, or $124 million, of that.

It also includes News Corp’s 65 per cent owned NXE Australia, which owns Foxtel and Fox Sports Australia and paid $10.4 million cash tax.

News media outlets have a social responsibility to be good citizens, which includes paying their fair contribution of tax – an not managing affairs to shift untaxed income offshore, in my opinion.

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Social responsibility

Accountants don’t always provide good advice when it comes to POS software for small business retailers

A newsagent told me this week that their accountant told them they should be using a particular software product to run their newsagency business. The software the accountant recommended has not beed made for newsagency businesses. It does not connect with any suppliers. It is not made in Australia nor is it supported in Australia.

The advice from the accountant was dangerous as had the newsagent followed it they would have disconnected their business from functions that are key to them.

I hear this too often, accountants providing software selection advice. Most accountants are not retailers, most have no understanding of workflow, data connection and other requirements specific to specialty retail channels. This is why I suggest to specialty retailers, like newsagents, that they do not rely on their accountant for software selection advice.

The accounting providing the advice to which I refer in this post uses accounting practice specific software to serve the specialty needs of their business. So, it is good enough for them to choose software tailored for their needs but not good enough for their clients to select software tailored for their needs.

Yes, I own a POS software company. However, I am not saying here choose Tower Systems. rather, I am saying to any specialty retailer, to jewellers, toy shop owners, butchers, bike shop owners, newsagents, pet store owners, garden centre owners, produce store owners, fishing store owners, homewares business owners and more – choose software that is fit for purpose, software designed for your type of business. Do your own homework. Make an informed decision.

Rarely will an external accountant have the practical experience with your specific type of business to provide good advice specific to your business needs, beyond accounting system interface needs.

By all means, rely on your accountant for accounting software advice like Xero versus MYOB, as that is in their wheelhouse. Given that smart POS software seamlessly links with Xero, MYOB and Quicken, the newsagency software you run or the specialty retail management software other specialty retailers run is best left to the experts in your business.

The easiest software Tower Systems can sell against is the generic POS software sold to a specialty channel retailer because once the retailer sees facilities that serve their needs the decision is easier. For newsagents, that is connections that serve in managing magazines, newspapers, meeting cards, stationery and more.

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Newsagency management

Terrific Mother’s Day campaign

The Hilton Hotel is Sydney has this wall for messages people can leave about / for their mums. It is part of  an awareness and fundraising campaign for the Mother’s Day Classic, an event in support of Breast cancer research. This display is setup in the foyer of the hotel.

What I like about is that it is complete. There is the large wall onto which people fix their messages. There is the poster explaining it. And, there are the materials for participation. They make it ease to engage.

This complete approach is worth remembering when running similar shopper engagement opportunities in our businesses – making it easy for shoppers to engage and thereby leveraging the benefit opportunity for the business.

Creating a wall of remembrance and thanks for mums has been on my list of Mother’s Day marketing tips for newsagents for years. How they have executed it at the Hilton is inspiring.

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marketing

Federal election comment: politicians should be required to spend a week working in a local small business

I first wrote here in 2013 that State and federal politicians should be required to undertake a week of genuine paid work experience in a small business every year. I believe it today more than ever.

Right now in Australia, during this 2019 election campaign where small business barely rates a mention,  this idea ought to be put to every politician from all parties. While they are happy to visit small businesses, have their photo taken, shake some hands and move on to the next photo op. Each visit is stage managed to show them engaged with small business. Yet, they are not engaged.

Politicians who really want to engage with small business will seriously consider this proposal. Sadly, that means none will, from any side will.

Here is my proposal from 2013:

Despite small businesses employing more Australians than any other business block we receive less attention from our politicians. This is in part our own fault driven by disconnected representation and a lack of unity on issues.

One way to redress the disconnect between small business and politicians would be to require every politician, federal and state, to spend a week a year working in a  small business in their electorate – paid real work.

The business should be chosen by random ballot – to remove the opportunity for mates looking after mates.

Besides the practical work experience, the politicians would gain a better understanding of the life and challenges of everyday Australians.

I am confident that after a couple of years we would see this small business work experience program drive a more practical narrative from politicians of all sides- and not just a small business focused narrative but one also more connected with real life.

We can’t compete with the lobbyists who are paid a fortune to guide our politicians to outcomes they want. Hence my call for a legislated week of small business work every year for every politician.

Imagine what discussions about paid parental leave, GST changes, assistance for the car industry or workplace relations changes would be like in the cabinet room if everyone at the table had done a week of real work in a small business beforehand. They would have reference points relevant not only to our small businesses but also to our employee colleagues, their constituents.

Thinking about this further today, I am confident enforcing a week a year working in a small business in their electorate chosen at random would result in better government not only for small business owners but for all these small businesses serve for it would add to the experiences of the politicians and change their conversations.

For the record: This post has been written and authorised by Mark Fletcher, Richmond, Victoria.

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Newsagency management

Why I am optimistic about indie retail in Australia

I was interviewed last week about indie small business retail in Australia and, in particular, why I am optimistic about the future. I have thought about this a lot as it is a topic prospective retailers often want to discuss.

From a headline perspective, people are not spending less, which is good. The trajectory is good. And while there is debate about what of this spending will be online versus the high street, retail is retail and as long as spending increases, retail businesses will benefit.

Thinking about high street retail. though, I am optimistic for engaged retailers, retailers embracing change, retailers not bound by their four walls.

There is no doubt that we are in a period of significant change. We have the disruption of online, disruption of completely new business models, banking challenges pushing cashless, about costs that force a rethink on shop floor engagement, overcrowding in terms of retail space per capita and more. Change surrounds us.

In this change, when you bundle it all together, is opportunity to explore the business considerably outside its usual four walls and it is in this consideration that I find a key opportunity for optimism.

For when we break free from the expectations of our traditional shingle is when we can find new shoppers and a fresh financial model for our retail businesses that can provide better results and they, in turn, encourage further change.

Change is good. Change drives innovation. innovation is key to better business results.

While there will be collateral damage through the change, those that remain confront wonderful opportunity.

For me, the extent of change is a key cause for optimism because I take change as the opportunity for major change and I’ll back myself as to results from this.

My advice to newsagents is to spend less time of what is traditional for your business and more time playing way outside traditions.

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Newsagency management

The immediate asset write off benefit for newsagents investing in their businesses

The immediate asset write off benefits that have been further enhanced this year present newsagents investing capital in their businesses tax and other benefits that are worth considering.

The details of what we in small businesses can do are outlined in the simpler depreciation for small businesses information from the Australian Taxation Office:

Right now, the threshold is $30,000. Spend this much on a depreciating asset and you can write it off this financial year. If your business books a profit, the benefit of the write-off can be considerable.

The Tax Office website has excellent details. Your accountant can help too.

The Small Business Development Corporation in Western Australia has an excellent explainer of instant asset write off on their website. Click here to access it.

Click here to access an explainer from Finstro, a business finance company.

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Newsagency management

Warm socks a hit for Mother’s Day

We are having terrific success with these unique warm fleecy socks for Mother’s Day. They’re sourced out of Canada.

They sell easily once you get shoppers to put their hand deep into a sock, to feel the soft comfort and enjoy the warmth.

This tactile approach to the product pitch, even at the counter where they are easily purchased on impulse by people looking for a different quality Mother’s Day product.

The beauty of the pitch is having cards available and a bag to make the whole Mother’s day purchase occasion handles in a minute or so. Plenty gf guys love that we make it easy for them.

Mother’s Day can be competitive in families. Mums can only use so many World’s best Mum mugs. We have found staying away from that cliche product to be beneficial.

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newsagency marketing

It’s first communion season

This is a valuable, local and family-oriented season with which newsagents can easily and perfectly connect – without coming across as being too commercial. It’s a good fit for our channel.

Cards, gifts, crosses, photo frames and rosary beads are some of the items that work well.

Basket data analysis shows a typical basket of items can easily pass $50.00 in some communities.

On social media, this season is an opportunity to share respect for the traditions of the season while at the same time representing that your business can help families celebrate the occasion.

Newsagents in marketing groups should already have the right product and collateral for easy and branded marketing.

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newsagency marketing

News Corp delays roll out of new commission structure

News Corp. released this notice yesterday:

Thursday 2 May 2019 

Dear Newsagents & Retailers 

In January this year, we informed you of our intent to consolidate our business systems and practices including the implementation of a harmonised and consistent commission structure across all ARM and News Corp Australia mastheads. 

The first stage roll out of this program was originally planned to begin in May this year. 

We would like to advise that the timing of this project has been slightly delayed. This program of work has been extended and is now planned to roll out in the new financial year. 

News Corp Australia is committed to simplifying our business to grow, and the consolidation of systems and processes across these two businesses forms an important part of this commitment. 

You should receive further detailed communications over the coming weeks outlining a range of upcoming business adjustments and improvements. 

We thank you for your continued support. 

Kind Regards 

News Corp Operations – QLD, NNSW 

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Newspapers

Against the odds: The Guardian breaks even

The Guardian has announced that they have reached break even point. This is a big story as it demonstrates that a thoughtfully developed and carefully executed plan can make a digital news platform operationally and financially viable.

As a subscriber to The Guardian and as on who appreciated their genuine independence, I am pleased to read of their success.

Today, we have announced that the Guardian has successfully completed its three-year turnaround strategy — we have hit our goal of breaking even, and made a small operating profit on our path to sustainability. This means that the money we make from advertisers combined with what we receive in the generous support from you, our readers, has this year covered the cost of producing the journalism that informs and inspires millions of people around the world. Our unique ownership model means we are not controlled by a billionaire owner, or a group of shareholders demanding financial returns — any profits made, and all financial contributions from readers, are reinvested directly into our journalism.

Further in the article by Guardian editor-in-chief Katherine Viner, there is a reflection that I think speaks to similar challenges faced by newsagents, challenges faced by the channel today.

Three years ago we faced a very different situation, when a broken business model for news was threatening to destroy media organisations around the world: print advertising was collapsing, newspaper sales were declining, and the promise of digital advertising growth was going almost entirely to Google and Facebook. These threats still exist, and while we’ve found a way to counter them, the situation remains fragile.

I see this story as offering hope and inspiration for newsagents as we transition our businesses, seeking new shopper traffic, higher margin dollar transactions and greater relevance to shoppers.

All in our channel need to work on:

  1. Attracting new shoppers.
  2. Driving up margin dollars earned per transaction.
  3. Bringing shoppers back more consistently.
  4. Managing our businesses for profit.
  5. Making our businesses appealing to everyone who walks past, walks inside, reads abut us, checks us out on social media.
  6. Changing shopper perception.

This means ranging new products, recasting the shop floor, breaking our current model. While this sounds dramatic, it is what is necessary. Historically, we have relied on consistent traffic from agency and low margin lines with the argument that high traffic makes low margin viable. That argument fails in 2019 with falling traffic from every traditional agency line product. While there are some exceptions, the channel as a whole is not experiencing such exceptions.

The future can be bright is we break our own model and recast our businesses.

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Media disruption

Pitch the new look BHG

The refreshed look for Better Homes and Gardens is a good reason to place the latest issue out today at the counter and with newspapers, as well as in the usual location. There is excellent TV coverage for the issue so support in-store should work.

Supermarkets are not likely to do anything special.

Historically, BHG responds well to in-store tactical placement support.

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magazines

You can’t miss the digital pitch from News Corp.

The News Corp websites give over plenty of screen real estate for their subscription promotions. The two pitched on he Herald Sun website are a good example. each pitched their $1 a week starter digital only promotion.

At $1 a week it’s an easy decision for plenty I suspect as it is loose change. That is how plenty of online subscriptions work, small weekly or monthly transactions you are not likely to notice and that offer incremental revenue to the supplier.

Digital gives publishers something that the physical product cannot, fractional transactions.

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Newspapers

Magazine location in-store

In US drugstores, larger format c-stores, more and more we see magazines located next to greeting cards. I have seen this in stores with a small range of cards and magazines as well as a larger range, where the two departments are next to each other.

This departmental adjacency is different to how the stores were laid out a few years ago.

I wonder if they have data that suggest commercial value from location next to each other.

While people enter these drugstores for reasons that are different to people shopping an Australian newsagency, the location of departments is something that should be regularly on our minds.

I think too many businesses incur channel have a sent and forget approach to department location in-store. Shoppers become store blind.

Changing the location of a department will usually frustrate some shoppers. It will also, usually, boost sales.

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Greeting Cards

Early engagement by police helps catch shoplifters

While this story is from the US, from the small midwest town of Burlington Wisconsin, it reflects how early engagement by police on social media can help apprehend shoplifting suspects.

Here is their first post and the photo:

Here is their next post with good news about identification:

This story also interests me because of the size of what was soles – large rolls of wire, so big they had to use a trolley to steal them.

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theft

Monthly real life titles grow market for newsagents

The monthly real life titles launched in recent times have delivered a net increase in magazine purchases. That is, they have not taken revenue from their associated titles in the magazine segment.

Looking at basket data for the That’s Life Mega Monthly, for example, I see that shopper often purchasing That’s Life in the same transaction. This is goon news that we can leverage through tactical placement.

A couple of ways to maximise the opportunity of the monthly titles are:   place the monthly next to the weekly;  and, if room permits, pitch both at the counter for a few days at least.

While magazines overall remain challenged, there are some segment level opportunities that we can leverage as engaged retailers. What we can do is different and more useful to the titles than any supermarket will do and this is something publishers could notice.

Beyond real life, categories like crosswords, current affairs (The Monthly, Quarterly Essay etc), health and gardening all benefit from tactical engagement in my experience.

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magazines

The importance of using software for managing pays

I urge all newsagents with employees to use accounting software for managing pays and producing payslips. The structure offered through this process could help you avoid issues down the track as the software creates and manages a paper trail.

There is a situation in our channel right now where a paper trail would have been helpful. No paper pay slips were issued, allowing for a Fair Work complaint that resolving is likely to be expensive for the business owner.

Payroll software or accounting software with payroll is not expensive in the overall compliance cost for business.

Getting this right matters in terms of employer obligations to employees, being able to respond to fair Work queries, for taxation purposes and to satisfy questions from franchisors as they navigate their reporting and knowledge requirements under the relatively new federal legislation that came out of the 7-Eleven pay scandal.

Click here to access the advice from the Fair Work Ombudsman website on pay slips.

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Newsagency management

Newsagents and the election

I missed this tweet from three weeks ago about News Corp., newsagents and the election.

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Social responsibility
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