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

retail

The City of San Francisco bans cashless stores

San Francisco last week moved to ban cashless stores. This is a big news story receiving plenty of coverage, like this from CBS:

San Francisco is about to require brick-and-mortar stores to take cash as payment, joining Philadelphia and New Jersey in banning an increasingly popular store policy of snubbing cash. Critics say refusing cash payments harms low-income people and the homeless, who are less likely to have access to credit cards.

And this TV news report:

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retail

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

Kikki.k store within a store at Sydney airport

At Sydney airport there is a Kikiki.k store now inside the newsagency. This is an interesting move. I’ve not noticed a Kikki.k store within a store before.

I’m not sure if it is expansion or retreat for the business. Certainly, the range and product presentation are true to the Kikki.k brand – different to other parts of the airport business.

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retail

How could the Amazon decision to block overseas sales to Australia play out?

Amazon recently announced they plan to block the sales of goods from its overseas sites to Australian shoppers because of new GST rules that apply from July 1, 2018, to items purchased overseas.

I think this issue will take time to play out. I say this based on Amazon being essentially a landlord for many businesses on its Marketplace platform. Those suppliers stand to miss out the most in that Amazon itself is already locating in its new Australian warehouse the items it is likely to ship from its own inventory.

Amazon Marketplace acts as a landlord with supplier pricing similarly structured to what we see from shopping centre landlords. There is a cost to place products on then platform and layers of other costs depending on services you leverage. However, it offers even more services.

For example, an Amazon Marketplace supplier can provide Amazon products for fulfilment by Amazon from Amazon warehouses.

The Amazon announcement that they will block purchases from overseas could result in overseas located Amazon Marketplace suppliers moving inventory to Australia for local fulfilment. That would be a win for Amazon as local fulfilment is a fee for service offer.

I expect that plenty of Amazon Marketplace suppliers are agitating Amazon re their announcement. If sufficient do complain, the company could address its apparent tech barrier to collecting the GST imposed by the Australian government. If these suppliers do not want to locate product at the Australian Amazon warehouse and if the business is important enough to them they will find another solution. If that solution cuts revenue Amazon wants, it will find a way to solve the problem.

Regardless, what actually happens will be driven by Australian consumer demand. The higher demand for a product the more likely it will be purchased by Australians through Amazon.

Amazon is a pragmatic, commercially driven, business. While their announcement last week was at first glance a shock, I can see ways this plays out well for the company, possibly helping it make more money without Australian consumers missing out on anything.

What does this have to do with newsagents? Plenty. This whole topic is at the heart of business discussions among large and small retailers today given the important of online in the retail mix. If the discussion feels foreign to you, there is much to learn about online and how it is impacting event consumer facing business around the world.

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retail

Displaying papers and magazines in Germany

While in Germany earlier this week for the stationery fair in Frankfurt and the Toy Fair in Nuremberg, I got to se some retail.

Here is the newspaper / magazine display in a local supermarket outside Frankfurt. I like the integration of papers with magazines.

Here is a high street news / tobacco / lottery / convenience business with their key news and magazine offering out the front of the shop.

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retail

Changes in summer holiday retail traffic in Australia

I have noticed a difference in shopper traffic in major centres in Melbourne this summer. Immediately after Christmas there was less traffic than usual and a week later there was more traffic than usual. Talking to some other newsagents they mentioned similar traffic changes in their businesses.

This post is an opportunity for others to comment about summer traffic. Is it up or down for you?

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retail

How far customers travel for what they want

We had a customer Christmas Eve driving across Melbourne, for an hour and a half, to purchase in-store a $180.00 product they discovered we have in stock. They have never been to our shop. They found us and that we have the item through a website.

This experience reinforces the in-store value of being accessible online. The shopper was shopping by brand, certain of what they wanted to purchase. They found us through the brand search and in a couple of clicks were able to see what we had in stock. One call and we had the item set aside for them.

This is an example of what retail experts call omnichannel – shoppers using multiple channels to a purchase. In this case, online and in-store.

We all was more people coming through the front door. This year more than any in the past the evidence is there as to the ability for to to attract more people through the front door through smart online engagement, online engagement that is closely linked with our in-store technology, to provide visibility on stock on hand.

Retailers not promoting the purchase of product online are missing out for sure.

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newsagency of the future

Myer leverages the counter

IMG_1957Myer in Melbourne is pitching Nutella at the counter in their bedroom furnishings department. If ever there was a time for retailers to be bold in counter impulse item selections then this is it. Here is Myer pitching something sold on a different floor in their sprawling store. Never promote at the counter what people expect.

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retail

Christmas shopping in high gear in Manchester compared to Australia

I have been in Manchester in the UK, population 500,000, for the last day and a half and have been surprised by the Christmas shopping traffic. Retailers I have spoken with tell me the traffic will not peak for at least two more weeks. So, this video I shot at one intersection does not reflect peak traffic. I’d love traffic like passing my door this time of the year.

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retail

And we thought vinyl was dead

Ten years ago few could imagine the resurgence vinyl records would have. Within a couple of minutes of each other I found three shops yesterday in Manchester in the UK. Each has a point of difference yet overall serves people with a common interest. I share the photos to show that what may be losing interest today for many businesses could be successful in the future for fewer businesses.

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newsagency of the future

Good security camera coverage in the newsagency

IMG_2744I was in a Sydney newsagency yesterday with 16 cameras monitoring the shop and a screen at the counter for watching.

The other, and probably more important, benefit of the screen is to show customers the store is monitored.

The more a person thinks they are likely to be caught the less likely they are to steal from a business (or home). St least that is what police have told me. hence the value of the screen at the counter showing the live feeds from the sixteen cameras.

With camera systems costing far less today than a few years ago, they more quickly pay for themselves as deterrents with this type of counter placement of the screen and with obvious placement of cameras in-store.

With theft costing between 3% and 5% of product revenue, investing in a deterrent is important, it provides a good return.

A side benefit of good camera coverage of the store is the ability to watch shopper traffic and learn from their interaction with displays. I find it particularly useful to fast-forward through footage to learn from customer actions in the business. The insights are valuable.

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Newsagency management

Typo teaches us a thing or two about discounting

Typo hit Twitter just now promoting a 40% store wide discount at their Chadstone, Melbourne, store today.

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This tweet teaches us several things:

  1. Be bold. 40% is a good discount. Too often retailers start small and don’t get the traction they need.
  2. Make it each. The Typo store wide approach is easily understood.
  3. Promote on social media. It is free and outside your four walls.
  4. Set boundaries. The Typo discount is off full priced merchandise. This precludes the Typo 3 for offers they have throughout their shops.
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marketing

Cool visual merchandising idea for newsagents

IMG_3251I took this photo in a funky shop last week and share it here as inspiration. To provide focus to some products they created a wall in front of the wall, to make for what looks like a shrine. They lined the cavity with gold paper and painted the new wall a nice contrasting blue. The result was a display you could not miss as you enter the business.

Ignore the products they are displaying and focus on the idea – of creating a feature space for a low cost, creating a space everyone entering the business notices as it is different, unexpected.

This is a perfect, simple and low cost way to get people looking at a category of products you want to feature. What is even better is that the materials you use can be repainted and used for another display at a later stage.

On the display itself, the more we make our businesses look less like newsagencies the better for this helps shoppers shed newsagency related perceptions when they shop with us.

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retail

Tobacco lunchtime habit?

The Lunchtime habit caption on the wall in the c-store I visited today is uncomfortably close to the locked tobacco cabinets. It looks like they are promoting a habit, unfortunately.

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retail

Women’s underwear and batteries?

IMG_2839I constantly look at other retail businesses to learn from product adjacency decisions. Supermarket s are particularly good to watch – usually at least. Check out the adjacency I saw at a Coles supermarket a couple of days ago: women’s underwear and batteries. I suspect it is not a deliberate decision but a placement more out of necessity.

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retail

Is selling body parts innovation?

In Hong Kong this week I found these packs of Freddo frog faces for sale, packaged for Christmas.

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Is this marketing innovation – to pull apart a loveable chocolate treat treat and sell off parts. What is next, Freddo legs? Frog’s legs are a delicacy so I guess we need to expect them.

Seriously, though, what is the point of this other? While I am not the customer, I don’t get what they have done here and why.

Harry Melbourne, the 18 year old chocolate moulder from Australian who invented Freddo in 1930 would be turning in his grave.

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retail

How a retailer had their business ‘stolen’ from them by a franchise promoter who said they can get a better lease deal

I was contacted a few weeks ago by a retail business owner who wanted to tell their story about how they had their business “stolen” from them.

Their lease was close to being up and the head of a franchise group happened to walk in one day for a chat about business. Thinking he was talking to a colleague, the retailer shared information about the lease and issues he was having in negotiating with the landlord. The conversation ended with no help sought and no offer made.

A couple of weeks later, the retailer was visited by the same person again and told that if he wanted to keep his business he would have to join the franchise group as they had negotiated a head lease for the premises and that trading as part of the franchise was a requirement.

The retailer was given an ultimatum: walk away from the business they had owned for years or join the franchise group. He saw it as no choice as the business was his main asset. He joined the franchise group.

His experience in the franchise group was awful, business went downhill. Product arrived in-store that he had not ordered and was unable to return. He was visited and told to do things in the business he did not want to do. He was forced to pay hefty fees he had not had to pay when he operated independently.

The business went downhill and the retailer eventually sold for a lower than reasonable price. He felt he had no choice but to accept the low offer because the franchise agreement had conditions relating to the sale that made it challenging for him to sell outside the group.

The retailer concedes his naiveté and wishes he had engaged a lawyer immediately on hearing of a lease deal to effectively steal the business from him.

This is the story as told to me. While I am not a lawyer, I suspect the actions of the franchise operator and the landlord were illegal and that the retailer could have taken action. But he was broken and was happy to get out.

This is a cautionary tale.

  • Never share lease information unless you are 100% certain of the person involved.
  • Never take on a business where someone else holds the head lease as this gives them power over you.
  • Never join a franchise when you feel you have been coerced, pressured or threatened to do so.
  • If you have been wronged, be prepared to fight at the earliest opportunity to right the wrong.

Industry associations representing retailers ought play a role in monitoring and protecting retailers in this area. When they take money from any franchise group and promote them in journals and elsewhere they offer tacit endorsement. It is incumbent upon them to ensure they understand the values and processes of any such business they endorse in this way.

Yes this story is vague. The franchise group I am writing about is litigious.

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Ethics
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