Received this in an email from Tattersalls today promoting their online network ahead of their retail network for this week’s $21 million draw. I would prefer that I could click a link in the email to find the nearest outlet.
OzLotto is worth $15 million next Tuesday thanks to no one winning last night. This will boost sales from today on and traffic from the weekend. Tuesday next week will see a 25% lift in newsagent traffic in most stores. Smart newsagent suppliers would find a way to leverage that Tuesday increase. (Last night’s $12 million jckpot delivered to my shop a 28% traffic kick.)
Just a quick reminder that this week’s Division 1 prize pools total more than $35 million! The week kicks off on Tuesday May 30 (draw 641) with an $8 million Super7’s Ozlotto jackpot. On Thursday, Powerball Division 1 prize pool is $3 Million (Thursday June 1, draw 524) and Saturday night’s Tattslotto Superdraw (Sat June 3, draw 2595) is offering a $27 million Division One prize pool !
Don’t miss out! Drop in to your local Tattersall’s Outlet, or purchase your Super 7’s, Powerball and Tattslotto entries online.
Good luck for the draw!
So opens the email from Tattersalls. The purchase online message is bold in the email and a link to their website. In Queensland, newsagents receive trail commission for a short time from online business. Elsewhere they receive nothing. So, while we continue to provide brand building effort we receive no compensation for helping the push to online lottery purchases.
Visit any newsagency today and you realise the importance of lottery business. Tonight’s OzLotto has jackpotted to 8 million. If other newsagencies are like mine they will experience a 33% sales jump not only in lottery sales but other categories of the business.
Some newsagents have been discussing how the channel could/should respond to the story in Crikey yesterday newspapers taking their brand online and mobile. Newsagents were created by publishers and are feeling somewhat left out of future plans by publishers. I posted a response to the email based discussion and thought I’d post it here as it covers some of the areas I’ve blogged about in recent times:
Our three key traffic areas are newspapers, lotteries and magazines.
Newspapers are reinventing themselves based on US and European experience. This reinvention is in pursuit of the online and print customer. Online they are acquiring businesses left right and centre. Offline they are developing new direct channels – petrol, coffee. While newsagents will remain important to them, they are not where they expect to achieve growth. Publishers will disagree but time will prove this assessment right. For our part we need to reinvent how we retail newspapers. This means breaking some rules. Smart marketing groups like newsXpress provides members with strategies which are boosting newspaper sales.
Lotteries are moving online. Tattersalls is there and have been for close to a year. It’s their biggest growth area. LotteryWest has announced and Golden Casket is online too. This will have a bigger impact on our stores than the newspaper online play. We can respond through exceptional service and providing product offerings not available online. Now more than ever we need to be exceptional retailers at the lottery counter.
Magazines are playing online too. Look at www.explode.com.au, www.vogue.com.au, www.zooweekly.com.au, www.cosmosmagazine.com.au. These websites demonstrate a focus on online compared to the newsagent channel. I don’t begrudge what they are doing – it’s smart for their businesses. Our response on magazines has to be to demand more equitable supply arrangements. The current model is broken and we are bearing the cost. Magazine sales will rise and fall for a few years yet before we see a significant drop in all but the major weekly and monthly titles. Newsagents need to focus on these popular titles now. Spending time of fringe titles provides a lower return. My magazines were up 22% in March 05 compared to 04. That’s in an old shopping centre. There are strategies which work.
There are ways newsagents can respond to these and other challenges. The scope of change we are confronting is equivalent to a business tsumani. We can see it coming and have seen it for some time. My pitch is that we get on a surfboard and rise the wave. No one is going to protect us. No one is going to fling is a life raft. Our suppliers must do what is right for their shareholders. Newsagents need to do what is right for their businesses. They need to embrace change for their benefit. I am happy to be an investor in newsagencies because the future is bright. This is why I joined newsXpress and have invested in the group. Newsagents have other options. To do nothing might give you some nice pictures of the tsunami wave coming in but you’ll have no-one to show them to.
Rather than the fluff at the ANF Hamilton Island Conference, the ANF ought to have invested equivalent dollars in mini conferences around the counter closer to newsagents so these issues can be discussed and strategies is response developed. Newsagents crave practical ideas they can implement today. If I want to feel warm and fuzzy I’ll cozy up to an open fire with a bottle of red.
Tattersalls is emailing its online customers to drive sales for this Saturday’s $21 million super draw. I’d prefer they invest their marketing dollars to drive consumers to their retail network of accredited representatives and not the Tattersalls owned online outlet. Tattersalls has excellent coverage through its retail network and there is no need for it to build an online presence other than to compete with the retail network. It’s retail partners have invested heavily in shop fits, employee training and brand building.
Tattersalls continues to build its online sales thanks to clever advertising and to a strong follow-up email campaign. I signed up as a Tattersalls online customer last year. Now, whenever there is a jackpot I receive an email reminding me to purchase. I can click on a link in the email and purchase online. It’s fast.
The only challenge is that I lost my password so I emailed Tattersalls ten days ago and have received no response. So, while their marketing is strong, the back end to their online offering needs work.
Like any customer experience, I’ve told plenty of people abut Tattersall’s not responding to my simple customer query. Their failure to assist me in a timely manner is a common problem with online businesses.
My personal experience of Tattersalls customer service failure is interesting in that Tattersalls agents (including my newsagency) are regularly mystery shopped and rated by Tattersalls. They drive agent to focus on customer service. This focus works. It delivers a consistently better customer experience. If they are to succeed online they need similar focus on service. However, I’m happy if the online experience is second class because I’d much prefer lottery customers purchasing over the counter in stores like mine.
Sales of the Herald Sun are somewhat reliant of newsagent traffic and promotion. Sales of Tattersalls product are reliant on newsagent traffic and promotion. Both suppliers require newsagents to provide significant space to promote their brand. It is disappointing, therefore, to see the promotion of Tattersalls’ online business at the Herald Sun website. While Tattersalls has every right to advertise their business and the Herald Sun has every right to take advertising revenue, this is a small wedge which will hurt newsagencies and one day someone will say where did it go wrong for newsagents. I’d prefer a model where newsagents participate in such developments of Tattersalls products online. We have been crucial to brand development and continue to be strong brand advocates today. Tattersalls could not gain online traction without this. And as a major supplier the Herald Sun could work co-operatively with newsagents on this.
In a challenge to independently owned small business newsagents, Tattersalls is leading the way in online lottery sales in Australia (and maybe the world). They have an easy to navigate website and an excellent marketing campaign. This puts their product on computer desktops across the globe. While their website is very clear in explaining where (geographically) Tattersalls is licenced to sell product, it seems easy to get around – unless they check the IP address for country of purchase.
The Tattersalls promotion of their website is a concern for existing Tattersalls outlets because it is a strong corporate competitor. The growth of online will slow or even decline the goodwill value of Tattersalls outlets. I expect Tattersalls would disagree with this assessment. They would not want their existing network to consider that Tattersalls’ moves online could harm the value of the existing network. But think about it. It must. I accept that Tattersalls online will gain incremental sales. However, they will also pull people off the existing network to an online purchase only situation and that’s where the cost will be to the existing bricks and mortar network. Having said all of that, it’s an appropriate development for Tattersalls and one I would take if I were them.
Newsagents need to engage with Tattersalls and leverage a portion of revenue. This is justified because of the considerable real-estate given over by newsagents and other Tattersalls outlets in brand promotion. It’s this brand promotion which builds sufficient trust to enable consumers to comfortably purchase online. Tattersalls could not build an online model without such a high profile bricks and mortar network.
Tattersalls sales in newsagencies are a vital traffic generator. Even though their sold alone percentage is high – 65% in suburban stores – there is evidence that customers who purchase Tattersalls product in a newsagency today are back multiple times in a week to purchase other product. If they stop making the Tattersalls product purchase trips these other visits are at risk and that, in turn, puts the newsagent business model at risk.
Newsagents need to be discussing these challenges with each other, with Tattersalls and with other retailers who rely on Tattersalls product traffic (publishers, card companies etc).
The Tattersalls move is but another supply chain related challenge for Australia’s independent small business newsagents.
and
Further to my earlier post on the shopping basket analysis for 53 newsagencies, I’ve been looking at what sells with each of the top 5 performing categories in city based newsagencies.
1. Newspapers
a. Sold alone 66% of the time.
b. Top companion categories (in order): Magazines (10%); Lotteries (5%); Photocopying (2%).2. Lotteries
a. Sold alone 65% of the time.
b. Top companion categories (in order): Newspapers (9%); Magazines (7%); Tobacco (6); Confectionery (5%).3. Magazines
a. Sold alone 48% of the time.
b. Top companion categories (in order): Newspapers (16%); Lotteries (10%); Confectionery (6%); Greeting Cards (5%).4. Tobacco
a. Sold alone 60% of the time.
b. Top companion categories (in order): Confectionery (8%); Drinks (6%); Lotteries (6%); Newspapers (5%); Magazines (5%).5. Stationery
a. Sold alone 30% of the time.
b. Top companion categories (in order): Newspapers (11%); Magazines (10%); Cards and Wrap (4%); Lotteries (4%).
This data does not account for multiple visits in a week from customers. However, there is anecdotal evidence to suggest that city newsagencies see customers 3.5 times a week.
This category level data underscores the risk to newsagents if key traffic generating categories are lost to their channel. For example, if lotteries pursued a more online model or a broader retail model (as expected following the shake-up likely to follow the public float of Tattersalls later this year) significant sales are at risk.
Most alarming in this analysis is the number of times sales from the top five categories are for items sold alone. Customers are visiting the newsagencies, purchasing the item and leaving. No up sell. Low retail efficiency. Bad for the newsagent, bad for suppliers of other products in store.
Newsagents are the second most visited retail channel in Australia yet this small sample suggests that the channel is not as successful at leveraging that traffic as another channel might be.
I’ll be using this data and more detailed analysis in the coming months to encourage newsagents to improve efficiency of their businesses as measured by shopping basket analysis.
Tattersalls has quietly launched online sales and there are unconfirmed reports that sales are well above expectations.
Tattersalls have partnered with the Telstra owned Sensis to place advertisements for Tattersalls online sales on the online White Pages.
This move by Tattersalls is another example of a manufacturer getting closer to the consumer (thanks to new technology) – shortening the supply chain and thereby ignoring the independent retailers (newsagents) who have been crucial to the growth of the brand through its formative years. Newsagents do not currently receive tail revenue for their customers switching to online purchase.
Tattersalls is the first of the state controlled lotteries franchises to offer online purchase.