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

Author: Mark Fletcher

Pitching card range

I did a quick walk around the core card offer in my high street store and used this on social media as part of an out of store promotion on card range. I shot the video on my iPhone and used iMovie to back it with some music. Ill drop the video on social media several times as a reminder as to range and that we have new cards – to reinforce the store as a good local destination for everyday card giving occasions. I think it is critical every newsagency do this, remind shoppers of card range and pitching their business as the destination.

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Greeting Cards

Parliamentary committee reports on franchising

On Thursday, the parliamentary committee reported on its inquiry into franchising. Here is their media release on this:

 Inquiry into Franchising in Australia 

14 March 2019 

The committee has completed its inquiry into franchising in Australia. 

A decade ago, the committee’s inquiry into franchising identified relatively isolated opportunistic behaviour by franchisors. The current inquiry has identified something much worse: systematic exploitation of some franchisees by a subset of franchisors and a regulatory framework that does not provide adequate protection against such practices. 

The existing regulatory framework and Franchising Code of Conduct were developed on the assumption that adequate disclosure would be sufficient to allow franchisees to protect themselves from opportunistic behaviour and power imbalances. 

Disclosure and transparency are still necessary, but are insufficient to protect franchisees operating small businesses against the abuse of contractual power by some franchisors. 

The committee is therefore proposing substantial changes to the Franchising Code of Conduct and to the responsibilities and powers of the ACCC. 

Recommended regulatory changes address: disclosure, franchise registration, supplier rebates, whistleblower protections, unfair contract terms, cooling off periods, exit rights, collective action, dispute resolution, binding commercial arbitration, alignment of industry codes, churning, education, and leasing arrangements. 

The recommendations are designed to lift standards and conduct across the industry and to rebuild confidence in franchising in Australia. 

The committee acknowledges the many franchisors with profitable franchise systems that treat franchisees fairly. In developing its recommendations, the committee has been mindful to avoid imposing unnecessary burdens on those franchisors, and to strike an appropriate balance between the legitimate business interests of both franchisors and franchisees. 

Newsagency marketing groups can fall under the responsibility of the Franchising Code of Conduct depending on their contractual arrangements That is why this topic may be of interest to some newsagents.

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Newsagency management

The ATO benchmark for retail newsagencies continues to be out of date

The Australian Tax Office uses benchmarks to trigger investigations and audits, among other things. Their benchmarks for our channel are out of date. Take a look:

I think they need to have a series of sub-cat benchmarks based on the product mix as well as the location. Rent, for example, on the high street is different to a major mall and in a rural situation it is different again.

Similar differences exist with labour, based on product mix and location.

Their cost of sales benchmark data is wrong, too, in my experience.

This matters because of actions by the ATO that can be triggered, attention that can be drawn, based on the comparison of data from a business against the benchmark.

I have sought engagement with the ATO on this, without success at this point.

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Newsagency challenges

Broadening the stationery appeal to find new shoppers

Inventory range is key to in-store shopper engagement and new traffic attraction in retail in my view.

In the stationery category, Typo has been demonstrating this with terrific success for years as has kid’s store Smiggle and as did in their earlier days girl-targeted Kikki.k.

I think expanding the range of stationery we carry is key to stationery sales growth in newsagencies. This is why I like the Harry Potter themed journals and related stationery items – people can buy them for beyond their intended function.

Serving multiple purposes is important to maximising the ‘stationery’ opportunity. I say ‘stationery’ because we need to not look it as stationery, not traditional stationery at least.

I was talking with a newsagent last week about these Harry Potter journals and they said they have enough journals. While they do have enough of journal journals, they have no licenced product journals, journals that can be bought by collectors and for brand fans, not because the products are journals.

It is important that a chunck of our stationery budget is spent on licenced products and not on purpose outcomes. The stationery world has changed ing many ways and this is one of them.

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Newsagency management

Major announcement from ALNA following negotiations with Tabcorp

Here is the ALNA announcement in full:

A better deal for lottery retailers: New Tabcorp model
After years of negotiating, ALNA and LRA are pleased to have secured significant improvements for you.
Today the Lott has announced a positive new retail remuneration model that reduces costs, increases commissions, and opens the door for newsagents and lottery retailers to benefit from digital sales.

We know there was a need for change and ALNA and LRA have worked very hard for many years to conclude a lengthy negotiation on a raft of changes to address shop fit costs, remuneration challenges and the cultural divide created by being excluded from online. We have made numerous submissions and thirty recommendations, and we are pleased to see these being implemented in this comprehensive and positive new model that we have been able to negotiate with Tabcorp to benefit our members.

More details about the remuneration model are attached, with more information still to come. Here is a summary:

New model

  • Increased commissions: More than 10% increase in commissions* earned on lottery product sales for outlets who achieve nine criteria that are existing requirements (subject to appropriate regulatory approvals by state gaming authorities for price increases and commission adjustments).                                                                                            For example, for a business with an average of $22,000 a week in lottery sales, this represents $220 extra commission a week or over $11,000 per year. And a retailer with an average of $50,000 a week in lottery sales could earn an extra commission of $26,000* per year – and this does not include the commissions from digital sales and the refund of DigiPOS.         *Retailers that are fully compliant have the opportunity to receive more than 10% additional income from the sale of lottery products (compared with FY18)
  • Refund of DigiPOS: Along with other savings already achieved by ALNA and LRA on shop fits, this new model removes all DigiPOS fees, and on top of that you will receive a refund for already purchased DigiPOS screens. For example, a two-screen outlet who had installed DigiPOS already at a cost of $8000, will receive this back in full as a cash-in-hand refund. For stores that install DigiPOS in the future,  the Lott will now pay for the total cost of future DigiPOS screens and all reasonable maintenance costs, completely abolishing these costs for retailers. This change is worth $17million over five years to retailers.
  • Digital sales: Recognising that omni-channel customers are the most valuable, retailers will finally benefit from online sales through an opportunity to earn commission and bonuses from all digital lottery purchases by members you register and through registered omni-channel customers who buy online at least once per year.
  •  Free membership for customers: Free membership for all customers, win notifications and a digital wallet for prizes that can be used in retail stores for new lottery purchases with no merchant fees.
  •  Adjusted franchise fee: A 1% increase in franchise fees is overcompensated by the increase in commissions and a performance adjustment to this franchise fee, along with the other new benefits available from the remuneration model.

How do you access the new model?

  • Engage with site surveys and comply with your franchise agreement, including nine criteria that are existing requirements e.g. participating in free training. This is rewarded by eligibility for the new benefits.
  • Offer new free membership registration to customers from your lottery terminal to link their online lottery purchases with their in-store purchases so you can benefit. Data shows that customers prefer to use both channels (for example, in-store during opening hours and online outside business hours). These customers spend more overall than any other lottery customer. This results in bonuses and commissions paid to retailers from online sales.

We are here to help you:

  • Many of ALNA’s and LRA’s recommendations have been implemented to make this new model easier to use and achieve. And we will be actively providing you with support and advice to help you comply with and benefit from this new model.
  • ALNA and LRA will be providing you with site survey guides and a checklist to help you receive a Green Performance Rating, which gives you the highest commissions and benefits available in this model.
  • You will receive methods to provide feedback on the model and its ease of use to ALNA and LRA.
  • The new model is unable to be introduced in South Australia at this stage and we will be working hard with the South Australian Government, regulators and our retailers there to get agreement on an approach that will allow our retailers to benefit.

We appreciate the patience our members have shown during this lengthy, complex and at times very involved consultation process based on detailed analysis and collaboration. The result is a better deal for our members that addresses many of the challenges and that opens the door for an improved partnership.

We have prepared more information explaining the new retailer remuneration model for members HERE

ALNA’s CEO Ben Kearney spoke at the launch of the remuneration outcome today and you can read his speech HERE

You can also read ALNA’s media release on the outcome HERE

If you have any questions, please contact your State Manager, come to our roadshows in March and April or email feedback@alna.net.au.

For the ALNA Roadshow schedule, click HERE

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Lotteries

Selling out of papers more often

We are selling out of papers earlier in the day than we used to. Getting additional stock is impossible. The only option is to guide shoppers to the nearby supermarket, which always has stock.

It is a fight to get an increase in planned supply and impossible to get additional stock on sell out.

All this feeds into our consideration as to the future role of papers in the store.

I’d be interested in comments from retail only newsagents.

Footnote: if you work for a publisher and plan to contact me to help. While I appreciate it, the reality is that your intervention should not be necessary in a good newspaper distribution model.

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Newspaper distribution

What has changed with Lottoland?

If you visit their website, k other than a terminology change, nothing obvious has changed. The most significant impact they are having is in educating lottery related gamblers about the convenience of online purchases and ticket management.

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Lotteries

Shrink-wrapping a magazine hinders sales

Anyone who watches shopper engagement with magazines, especially in Australian newsagencies, knows that browsing is key to selling any title. This is why I am surprised that Spaces magazined is shrink-wrapped, hindering browsing. It will be interesting to see how sales play out for the title.

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magazines

Pitch the latest issue of Who magazine

The latest issue of Who magazine, featuring Luke Perry on  the cover, is worth pitching on social media as his fan base spans generations from original 90210 fans through to Riverdale fans.

This issue of Who is an excellent example of when we can use a title to attract shoppers.

Here is what I posted on Facebook with the cover shot:

There is a lot of love for Luke Perry in Australia is the sales of the lates issue of Who are anything to go by. People are loving this special tribute put together by the folks at Who magazine. Luke’s career spans generations from 90210 through to today’s Riverdale. Vale Luke Perry.

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magazines

Cumbersome prepay and save offer from News Corp to try and grow newspaper sales

News Corp in Queensland has pitched a prepay and save promotion to newsagents using the bloated Blueshyft platform.

I say it is cumbersome because of the approach being taken by News / Blueshyft and the operational implications, especially for those with their POS systems integrated with accounting software.

As usual, News did not tell key stakeholders, the software companies, about the promotion. This matters as it is the software companies that are carrying the load of calls from newsagents trying to work out how to operationally run the promotion.

Here are some details from the launch announcement from news:

On Monday we launch our new initiative – Prepay & Save. This  Newsagent-exclusive promotion is designed to support you and increase sales by rewarding your loyal buyers, driving higher purchase frequency by offering an always-on discount equivalent to  20% discount.

What is the offer?

Customers can top up a Prepay & Save Account with either $20 or $50, and get:

1st Paper Free

Every 5th Paper Free (any paper, day of the week)

No lock in contract

This offer is only available to Blueshyft agents. You will receive many benefits by participating in this offer, including:

– Offer Exclusivity – Prepay & Save is only redeemable at Blueshyft newsagencies so customers will need to return to a Blueshyft newsagent to receive the ongoing discount.

– New Sign Ups: earn $5 commission for every new customer sign up. Paid by Blueshyft monthly on the 21st of each month (for the sign ups achieved in the month prior).

– Newspaper Redemptions: standard commission will be paid for every paper redeemed through the Prepay & Save Program (including the free copies). Reimbursements will be paid by Blueshyft

fortnightly for the prior two weeks of newspaper sales taken through the Prepay & Save platform.

This offer costs the newsagent absolutely nothing! You will be fully reimbursed for all paper transactions through Blueshyft so there is absolutely no reason not to participate.

We also have a special launch incentive exclusive to Queensland which could see you earn $30 dollars for signing up 3 customers and a further $50 if you sign another 2 to make it 5 in total. Full details on the attached flyer.

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Newsagency management

PacMags Bill Busters promotion

Newsagents who are part of the nexus program from Pacific Magazines will have been advised of the Bill Busters cash prize promotion that starts next week.

Based on past years experience, this promotion is an easy win for attracting shoppers and driving purchases.

My advice is to engage early and regularly with the opportunity with in-store and social media engagement with multiple touchpoint. We know from research that three points of promotion is the minimum required to get value from this promotion: front of store, magazine department and counter.

I appreciate plenty here will say why promote products from which you only make 25%. While I think that is a fair argument to make to any magazine publisher, it should not be a barrier to engagement with the certain win of this promotion.

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Uncategorized

At Shoptalk in Las Vegas

Shoptalk brings together more than 15,000 retail professionals for four days to talk all things retail and to contemplate the future.

This year, Shoptalk has been extraordinary, insightful, challenging and encouraging.

On the last day, the team I was here with shot a brief video outlining key takeaways. However, this shot video does not do justice to the valuable content and learnings. These will be obvious over the rest of this year and into 2020.

Here is the video we shot:

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Uncategorized

Dealing with customer complaints in 2019

Today, shoppers have multiple ways they can complain about a product, a service or an experience with a retail business. Whereas in the past it could have been by phone or in person, today, they can call, email, Facebook message you, Twitter DM you, review you on Google, Facebook, TripAdvisor, Yelp and more … they can complain in places away from you too in social media groups – the new form of word of mouth. This lis is not complete.

My point is that complaining is easier. While this facilitates fake complaints from people with a legitimate or illegitimate grudge (see some comments here) or .com a competitor.

Since complaining is easier, the responding is harder. How, when and where we respond is critical. 

In the response is not what a complainer wants but is truthful, they may avert it or say you are a bully or say you are lying or have some other attack. So, you need to be aware of this as you prepare your response.

To be on top of this challenge you need a consistent process, a structured process … to ensure you respond to every complaint. Your responses need to be truthful. They need to be human, in the voice that fits with your business and the customers you aspire to reach. I say this because your response is not only to the person complaining but all in your community.

Today, wha this means, is being on the platforms used by you customers and being responsive on these. This is a tough challenge for small business retail. There are outsource businesses that will do this for you. However, in our channel I don’t see it as an opportunity.

But no matter how good your processes, how accessible you are and how truthful your position, sometimes, you need to give a complainer what they want even if they are wrong because the cost of not doing that is greater than the cost of being right. I say this because today’s megaphone world of social media is easily leveraged by those few out there who know they can get stuff and benefits by being critical at volume. And this is the biggest challenge in this area of customer complaints today.

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Uncategorized

The case against cashless retail

When tech fails whether in-store or between the store and the banks, it kills the cashless trading option as I saw earlier this week.

While I remain certain that cashless retail will become more pervasive, with it will come challenges for businesses as this one discovered.

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Uncategorized

Pitching gift packaging off-location to drive sales in the newsagency

We are pitching gift packaging off-location. That is, away from the usual fixed location for the category.

This display brings the product to life more than usual and puts it in front of more shoppers. Both actions grow sales sales.

This photo is one side of the display.

This photo shows the other side of the display. You can see we have different approaches for each side.

The display is (easily) changed weekly  to offer a fresh view  to regular shoppers and as part of the process of incremental change / refresh for the business. Sales growth is the core focus of all this.

The gift packaging category does not do as well for newsagents as it should. I say this based on newsagency sales benchmark data and comparison of this to overall gift packaging data.

Bottom line: we should be selling more bags, wrap and related gift packaging items. I think our sales should be at least a third higher than they are.

While some might say this is a function of product, I think it has more to do with lack of creative engagement with the category in-store.

We can fix this with minimal capital, inventory and time investment. Hopefully the photos act as inspiration.

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Gifts

A more relaxed approach to magazine retailing

I am grateful for the opportunity to visit Bass Pro Shops Outdoor World in Las Vegas recently. This massive fishing, hunting, outdoor, firearms and country living business delves into related categories, including home furnishings, magazines and cards. Here is a video showing their in-store pitch for the three categories. It a relaxed approach to magazine retailing especially. For context, I’d note the cost per square metre of this space for them is barely a fraction of the cost to the average Australian retail newsagency business.

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magazines

Newsagency marketing tip for when there is no season

Too often, retailers are driven by seasons, obsessed by seasons. Everyone hops in the one boat to focus on the one calendar event. While I understand that, I also see it as a missed opportunity.

In my shops we play more outside of the major season focus, often creating local seasonal opportunities of our own. This works because we have no competition and because we do it with minimal or no capital outlay.

This is on my mind today as we are between Valentine’s Day and Easter. Smart retailers have one or two mini seasons or focuses running right now as being up now with easter is too early. These same smart retailers will, during Easter, have at least one other local ‘season’; or focus running, to broader the appeal of the shop to passers by and on social media.

The less we follow the heard and the more we engage with unique opportunities the broader the potential of our reach.

What minor seasons or focuses to you engage? … this is 100% up to you, the products you have, your local area, your interests.

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marketing

Some personal news…

This announcement was shared with newsXpress members and suppliers earlier this week.

NEWSXPRESS OWNERSHIP ANNOUNCEMENT.

newsXpress founding director Graham Randall has agreed to sell his shares in the newsXpress business to Mark Fletcher, his partner since 2005 in newsXpress. The transaction will be completed in the next few days.

Having founded the business in 2001, Graham played a key role in its formation and early development. He saw the need for a group for proactive newsagents as well as the need to move the group from its Queensland base and in 205 invited Mark Fletcher to acquire an initial share in the business.

The years since 2005 have seen considerable growth in terms of rooftops and in terms of services delivered to its small business retailer community.

newsXpress today is considerably more diverse than the group of even ten years ago. The company has plans for considerable evolution through 2019 and beyond.

The sale and acquisition transaction has been negotiated between the two and with a focus on ensuring operating stability and commercial opportunity for newsXpress members.

Graham Randall’s own newsXpress businesses will continue to be trade under the newsXpress name and be part of group.

Graham Randall commented … “The time feels right for me to step away from an ownership role in newsXpress. I know it is in good hands and have every faith in the whole team to continue to develop and evolve the group. This move frees me to explore some other opportunities in addition to my existing retail businesses. I wish newsXpress, its employees and its member businesses every success in the years ahead.”

Mark Fletcher commented … “Graham Randall had the vision to create newsXpress and through it to provide many newsagents a pathway away from the traditional and into a brighter future. I am grateful to Graham for the thirteen years of business partnership and look forward to plenty more years of friendship. While this is a change to the ownership of newsXpress, it will not result in dramatic change in what we do.”

Given the stable management and operating structure of the business, it will be business as usual for newsXpress, its supplier relationships and its members. The company has a skilled teal of merchandise, marketing, sales and creative professionals who work enthusiastically and diligently every day for the benefit of the newsXpress member community.

newsXpress today serves in excess of 240 locally owned retail businesses located in all Australian states and territories. It also operates a network of websites that acquire online orders on behalf of newsXpress member businesses as well as running a network of social media accounts with a combined reach of in excess of 100,000 people.

—END–

As the Australian newsagency channel continues to evolve, so will businesses that serve the channel. I am energised and focussed on presenting to newsagents through my businesses commercially valuable opportunities and through this place freely accessible ideas and encouragements for embracing valuable change.

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newsagency of the future

Dealing with retail business employee theft by a minor

If you suspect an employee aged under eighteen of theft from your business you need to be careful as to how you navigate this. It is important to take time to decide the appropriate plan of action before you approach the suspect to even investigate the matter. The wrong approach could have challenging consequences for you, your business and the person you suspect.

My suggestion is that the moment you have a suspicion, invite the suspect and a parent in for a meeting. have someone else there as well, as your witness.

  1. Present your evidence and invite their response.
  2. Ensure you are civil, factual and not emotional.
  3. Listen to their response.
  4. If they ask what you want to do about it, be sure you have a reasonable response ready. If there is agreement on this, move forward.
  5. If there is not agreement on what you propose, or if they deny the theft, you need to be ready with your next course of action. This course of action should be reasonable and focussed on getting to verifiable truth.

If there is agreement that theft occurred and the employee is casual, my suggestion is immediate termination with you paying out what is owed by law. Put it behind you. Never speak of it outside the business. To constantly revisit it, especially outside a major city, can be debilitating.

If there is not agreement, ask they other side what they want to do. It could be that even though they deny it they are happy to walk away from the business. If this is not the case, you could suggest mediation. The Fair Work Obmudsman office could possible play a role here. You could equally suggest that both sides take the matter to the police.

The reality is that once you make a complaint to parents you have to be prepared to follow through, to see the matter to a reasonable end.

My core message today is that handling the suspected theft by someone under eighteen takes care and planning, to ensure that you, your business and the suspect are all dealt with fairly and safely.

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Management tip

Gotch disrespects newsagents, again

Newsagents today received a magazine from Gordon and Gotch with this sticker on the cover promoting direct subscription. I doubt any newsagent seeing the sticker would put the title on display for it seeks to drive revenue from the channel, to the publisher. What are the people at Gotch thinking letting this through? Clearly, not thinking.

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magazine distribution

The magazine category newsagents can easily grow

The crossword category continues to perform well in newsagencies. Better still, it is a category that responds well to in-store attention. I say this based on my experience and on the experience of newsagents I have recently spoken with.

In one store achieving 4% year on year growth, they boosted that to 8% by changing the location of crossword titles to be next to weekly magazines, using the crossword titles from pacific Magazines and Bauer as the starting point given their connection to some of the weekly titles.

My feeling is crossword shoppers are more likely to be loyal. This is in part due to non newsagency competitors not having the range we have in newsagency businesses. Also, offering a cutaway service helps ensure this stickiness.

Crossword shoppers also shop outside the category. They will buy cards, jigsaws, games and more.

No matter the performance of crosswords in your newsagency today, look over this list of suggested engagement with the category. Each is easy to implement and has no cost. There is no downside to investing a small amount of time in driving crossword sales.

Move the location of crosswords in the magazine department. My suggestion is next to the weeklies. If there is not enough room for all, at least in produce a column of crosswords.

  1. Place crossword titles with their parent brand: Better Homes and Gardens and Australian Women’s Weekly, for example.
  2. Pitch a crossword or two at the counter.
  3. Trial placing your most popular two crosswords next to daily newspapers. Count how many you place so that you can measure the success.
  4. Run a loyalty program for magazines. Crossword shoppers will appreciate this and drive more whole of business shopping as a result.
  5. If you have a table where shoppers can sit for a while, consider opening a crossword and placing some pens nearby so people can engage.
  6. Shine a light on your range on social media – let locals know that your business is the local destination from crosswords.

In my experience, a small investment in crosswords pays off in sales growth. Given the loyalty of the crossword shopper, this growth is valuable for more of the business.

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crosswords
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