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

Newsagency marketing tip: control how people see your business

You control how prospective customers see your business. This matters if you want to attract people who are not looking for what they think a newsagency is.

Your front window, social media posts, advertising (if you do any) … in fact, anything you write, say or do outside your business that can reflect on your business determines how people see your business.

If you are concerned people think of your business as traditional newsagency, you know you do not have your messaging right.

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marketing

Checking out Lottoland syndicates

With Lottoland no longer selling bets on the numbers drawn for  Australian lottery games, I expect it will intensify its marketing of bets on overseas lotteries.  One focus I think we will see is more of is their syndicates. They have a comprehensive offer.

Check out the syndicates page on their website. It offers plenty of syndicates. Their packaging and marketing is clever. It is competitive against the way syndicates are handled for Australian lotteries.

Understanding a competitor is a important step in successfully competing. This is why I suggest newsagents who sell lottery products thoroughly research the Lottoland pitch, including their syndicators pitch.

I don’t see Lottoland retreating from Australia in the short to medium term. It wouldn’t surprise me if we heard more from them, not less … along with all the others players now in this online lottery relates space.

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Competition

Lotterywest fails to meet GS1 barcode standard

Lotterywest has released new Lotto Terminals that print Price Embedded Barcodes (PEB), like Tatts. 

These barcodes do not meet GS1 Price Embedded Barcode Standards. This means they will not scan like the Tatts Lotto Tickets and put in the price automatically. This only effects West Australian sites who have these new terminals and want to scan their lotto tickets. 

Experts at my newsagency software company have looked at the barcodes on the Lotterywest tickets and confirm they do not meet GS1 Price Embedded Barcode Standards. Tower has sent information on Price Embedded Barcodes to Lottertwest many times.

The actual problem is the prefix of the barcodes. “51” is not a standard prefix for a PEB hence they don’t scan as a PEB but rather as a product.

Hey Lotterywest – this is not rocket science. Your organisation requires retailers to follow standards. You should do this yourselves.

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Lotteries

ACCC decides to not oppose acquisition of OfficeMax by Platinum Equity

Platinum Equity owns Winc. Winc is what Staples is now called in Australia. Staples took over Corporate Express earlier this decade.

The proposed takeover strengthens Winc against its competitors, which include hundreds of small business retailers in the stationery space.

The ACCC announced yesterday that it will not oppose the takeover.

The ACCC will not oppose the proposed acquisition of OfficeMax Australia (OfficeMax) by Platinum Equity.

Platinum Equity owns Winc (formerly Staples Australia). Winc and OfficeMax both supply office products to commercial and government customers in Australia.

“Following extensive market inquiries and analysis of documents and data, the ACCC has decided not to oppose this transaction. The ACCC believes the transaction will lessen competition but doesn’t reach the threshold of causing a substantial lessening of competition,” ACCC Chairman Rod Sims said.

“Any deal that sees the largest supplier acquiring the second largest in a market will require very close scrutiny. However, in a finely balanced decision the ACCC found that a combined Winc-OfficeMax would continue to face competition from the remaining key suppliers, Complete Office Supplies (COS) and Lyreco.”

The consolidation we are seeing in Australia in the stationery and office products space follows similar consolidation in the US in the office products space.

This Platinum Equity takeover of OfficeMax challenges newsagents to address undercapitalisation, inefficiencies and uncompetitiveness in its older stationery wholesale businesses such as GNS nationally and Ancol in South Australia.

GNS has already moved in part through the goal of broadening its shareholder base. But that move is not enough.

In my opinion, the proposed move by GNS is too small, and probably too late. Given the inaction by the GNS board on structural matters for the last ten years or so, more bold action is needed to catch up and facilitate greater competitiveness for newsagents.

To confront the challenge of a bigger Winc and to provide newsagents with better buying, GNS needs to tap into something much bigger than its small business owned Australia only operation.

I think Ancol should have closed years ago. The South Australian marketplace is too small for it to supply newsagents on competitive terms.

If Winc moves into retail, as some who watch the space think it will, the competitive challenge to newsagents will be greater as it will be on show, for us to see.

What many do not see today is the reach by Winc online for stationery for small business and even home use. Theirs is an extraordinary business, leverage excellent early work by Corporate Express and building on that in recent years to provide fast delivery oil office products at competitive prices. This is what has hurt newsagency stationery sales the most. This is where GNS is most challenged.

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Newsagency management

I was wrong about Gotch, they don’t care about newsagents

In my post last week about the missteps by XchangeIT and Gotch on the data handling for the new Gotch gift offer, The Market Hub, I said that I thought the issues wold be resolved at the Gotch end, negating the need for newsagency software change and therefore costs falling to software3 company owners and newsagents.

Thankfully, it appears that The Market Hub from Gotch will be established as a separate supplier through XchangeIT, negating the need for any software changes. Why is this relevant? In my opinion it reflects the poor preparation by Gotch and XchangeIT for this project and an arrogance that they expect others to invest capital on their behalf. But they are from the magazine distribution side of the business so I guess that is their usual approach.

Turns out I was wrong. Gotch does not plan to operate within the IT standards they helped to establish. They have advised they will use the magazine file structure to send gift produce delated data, breaking the standards. They will do this with XchangeIT watching them, yes, the same XchangeIT that fines newsagents for poor data management.

I think this disregard by Gotch of the IT standards they imposed on n newsagents speaks to their views on the future of the channel and, in particular, the distribution of print product.

If they believed in the channel they would invest in the right tech approach to their data challenge.

If they respected newsagents they would follow the IT standards they themselves helped to bring into place.

If they believed in their own future they would invest in that. Instead, they have invested in product and marketing but not in ensuring data flow within the standards they established.

I think this looks bad for Gotch. However, I suspect most newsagents will not fully grasp why this is an issue. This will make it easy for Gotch to say I am wrong and that my software company is the problem.

Here are questions and answers that define what is happening and why I have written here and previously as I have:

  1. Does the gift product data from Gotch and sent through XchangeIT meet the data standards they participated in developing? No.
  2. Can Gotch fix the problem at their end? Yes.
  3. Will Gotch fix the problem at their end? They have said no.
  4. What does Gotch want done? They want the software companies to change how the magazine data file is used, to enable the misuse of the file structure by Gotch to work with established newsagency software.
  5. Who does Gotch propose pays for the software changes? So far, me and the other software company owners.
  6. How could this problem have been avoided? Through discussion with the tech stakeholders long before launch as that would have taken away the time challenges given that the Gotch gift product range has now been launched.

Gotch may defend their position by saying my concerns are driven by my work with newsXpress. Such a statement would be untrue. My concerns here, as explained, are purely tech standards related.

If Gotch cared about newsagents they would respect the IT standards as much as they expect (and demand) newsagents respect them.

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Ethics

Lottoland announces end of betting on Australian lotteries

Luke Brill, CEO of Lottoland, send this message to customers this afternoon:

Hi Mark,

We’ve not seen you around in a while and it would be great to have you back on board. I’d like to keep you up to date with all things Lottoland.

It’s been a huge year for us, in which we crowned our first Millionaire, paid out over $15m in winnings and launched our partnership with the Manly Sea Eagles and the Northern Territory’s, Mitchell Street Mile.

These are milestones we’re immensely proud of and are a sign of things to come.

On a different note, sadly, I have to announce that due to regulatory changes, after November 30, we can no longer accept bets on the Australian Lotteries. Namely, Mon&Wed Lotto, Tuesday Lotto, Thursday Lotto and Saturday Lotto.

Single and Subscription bets on these lotteries that were placed before November 30 will be honoured and winnings will be paid as though you entered the official underlying draw. Subscriptions will not be renewed after this date.

We will continue to keep you informed about new products and exciting alternatives available. To give you the chance to explore, here’s an early Christmas present:

Whatever you spend on your next cart, the first $5 is on us!

Kind Regards,

Luke Brill (CEO Lottoland Australia)

The withdrawal from betting on Australian lotteries has been brought after a long battle including late but welcome, I am sure, engagement by politicians from all sides on the Lottoland threat to lottery retailers, Tatts and, most important, government revenue.

I think this note from Brill could reflect a change in messaging from Lottoland.

Brill specifically refers to a Lottoland purchase as a bet. This has not been key in their advertising to now.

Yes, it is a bet, something that even Tatts did not push back against until late in the day.

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Competition

The importance of acceptance cards in the card department of a newsagency

Acceptance cards are an often neglected part of the card story in newsagency card departments.

Tucked away, out of sight and not promoted, acceptance cards are always there, but often forgotten.

Yet, acceptance cards represent a point of difference opportunity for us, they and other cards with them can be promoted to pitch a point of difference inn our businesses over other card retailers. They can be leveraged to reinforce us as card specialists.

One way to pitch these small format cards is to talk about the keepsake value of the acceptance card. Wedding couples love having cards to look back on ten, twenty and more years later. Our range of cards in-store allow us to help create these wonderful memories.

Facebook posts talking about making memories is one way we can leverage the opportunity of acceptance cards and similar for our businesses. A thoughtfully written social media post could educate engaged couples about collecting acceptance cards for future memories.

I think too often we expect cards to sell themselves without any out of store call out. We can’t rely on cards to sell themselves at all. No, we have to continually educate people about card giving. We have to show the importance of providing the keepsake memory in a form people will cherish in years to come. This is why I write about acceptance cards today – they lend themselves to this type of promotion.

While you won’t retire on the mo new you make from acceptance cards, you will benefit from reminding people in the area you serve that you have a range and educating them about how loved acceptance cards are by recipients.

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Greeting Cards

Do you still stock erotic magazines?

There was a time when Australian newsagents received a broad range of soft-porn erotic titles. From what I see, however, that is not so much the case today. Seeing this post on Twitter this morning. referencing a title supplied to some UK newsagents it made me wonder what Aussie newsagents receive today.

Do you still have erotic or soft porn section?

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magazines

Fairfax advertising with the New York Times

This is something you would never have seen in print: a Fairfax masthead, The Age, being advertised on a New York Times platform.

That this is being done speaks to the extent of change we are amidst – not only in print media but in all areas of business. What was usual previously can be rare today just as what was taboo previously can be usual today.

Indeed, the Fairfax ad on a NYT site is a reminder that we cannot apply to today’s business world some expectations and rules from years ago.

In our channel for decades we lived with the understanding of territories. In the newspaper and magazine distribution space territories still exist. However, in retail, there is no such thing as a territory, certainly not when you can easily win a customer online. These are the days of retail without borders.

Related: B&T had an interesting report about cross-border sales.

It is in parts of our businesses where we practices of yesteryear continue that hold us back. While the world has moved on, in some parts of newsagency businesses the old way is the expensive and slow way. I am thinking here in particular of the old-school regulation around lottery products, magazine distribution and newspaper distribution. In each of these areas our ability to compete and be relevant is being held back by old practices and out of date compensation.

Some newsagents are breaking free and expanding their product portfolio way beyond what has been traditional for a newsagency and through this facilitating relevance in this new world. Hey if a couple of old-school newspaper publishers can do this so can we.

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Media disruption

Allens changing the perception of lollies

I love what Allens is doing this Christmas with their pop-up shops in some capital cities. I saw their Sydney pop-up a couple of weeks ago at Westfield in the centre of the city. They are getting people to pay over the odds for jars of personally selected lollies with a personalised name sticker. It is a very smart marketing move recasting the image of the Allens products.

What Allens is doing is recasting their image and driving appeal with a a broader pool of customers. Its is a smart move. Just about any business can do this.

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confectionary

Why Tatts is asking retailers questions about employee pay and conditions

Newsagents have been wondering why Tatts is expressing interest in employee arrangements in newsagency businesses. I have had plenty of questions and I know others have too.

This situation has come about because of the federal government passing vulnerable employee legislation following the 7-Eleven debacle. The Fair Work Ombudsman website sets the scene:

On 15 September 2017 the Fair Work Amendment (Protecting Vulnerable Workers) Act 2017 took effect. It makes the following changes to the Fair Work Act 2009external-icon.png (the Fair Work Act):

  • increase penalties for ‘serious contraventions’ of workplace laws

  • make it clear that employers can’t ask for ‘cashback’ from employees or prospective employees

  • increase penalties for breaches of record-keeping and pay slip obligations

  • employers who don’t meet record-keeping or pay slip obligations and can’t give a reasonable excuse will need to disprove wage claims made in a court (this is also referred to as a reverse onus of proof)

  • strengthen our powers to collect evidence in investigations

  • introduce new penalties for giving us false or misleading information, or hindering or obstructing our investigations.

Read what the Fair Work Ombudsman website has to say about franchisors that have a significant amount of influence or control over the business affairs of the franchisee:

These changes apply from 27 October 2017.

Franchisors and holding companies (a company that has control over subsidiary companies) can be held responsible if their franchisee or subsidiary doesn’t follow workplace laws about minimum entitlements, the National Employment Standards, awards, sham contracting, record-keeping and pay slips.

This will apply to franchisors that have a significant amount of influence or control over the business affairs of the franchisee.

Franchisors or holding companies could be liable for breaches or underpayments if:

  • they knew (or could have reasonably known) that a franchisee or subsidiary wasn’t following workplace laws
  • they didn’t take reasonable steps to prevent it.

We are working with franchisors, their advocate and advisers and will have more information in our Help for franchises section when the changes take effect.

Tatts is acting because of an understanding of that term – significant amount of influence or control over the business affairs of the franchisee.

It’s not only Tatts caught in this. Any business that can be claimed to have a significant amount of influence or control over a downstream business is in the cross hairs.

I think there will be plenty more news and engagement about this in the channel river the next few months.

The challenge is the definition: significant amount of influence or control. It is not as clear as it could be. Some politicians say the Fair Work Ombudsman has overreached. We will have to see how that plays out.

There is plenty of advice online outlining the obligations for franchisors and organisations like Tatts outlets.

For a government that said it would reduce red tape for small business, this legislation is considerably adding to it.

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Newsagency management

Newsagency marketing tip: shining a light on friendship

This image is another example of how an image can drive social media engagement, which then drives in-store purchases.

A brief moment taken to put items together and photograph them pays off when a post drives outcomes at the register. It is easy to do this yourself, without using an ad or social media expert.

This is simple and effective marketing, for which your business can be known and through which your business can break free of the usual advertisements that hit people on social media and elsewhere.

Easy visual marketing is the best given the platforms to which we have access to today.

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marketing

Newsagency management tip: don’t clog your data

Some suppliers load your computer systems with considerable more data than is necessary. Take Blueshyft, in my opinion they want you to load 100,000s of stock items because their tech approach is inefficient. Their inefficient approach is decd and abetted by XchangeIT. This is all so you can sell low margin agency product that leeches off your traffic rather than driving net new traffic … again, in my opinion.

Bloated data files are not good practice in any IT system.

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Management tip

Pet Barn leads on pet Christmas gifts

Visit your local Pet Barn right now and you see a consistent pet Christmas offer. I have been in four stores this week and the pitch is consistent, and good. Pet gifts are massive. I have had success in the dog and cat gift space through the year and at year end.

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Gifts

How is Christmas going for you?

Early year on year sales data I am seeing indicate a solid start to Christmas with some stores achieving terrific year of year growth. This data is from a range of newsagency business situations – city, country, shopping centre, high street, banner group and independent.

Card sales are strong, especially boxed cards with some stores tracking double digit growth. This is good news given the early sales of boxed cards compared to singles.

Gifts are strong too.

While it is too early to say how Christmas 2017 is compared to 2016, the early indications are encouraging.

How is Christmas going for you?

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Newsagency management

News Corp., launches digital-only subscriptions

News Corp. has launched app-only digital-only subscription offers for major capital city daily newspapers –The Daily Telegraph, Herald Sun, The Courier-Mail and The Advertiser.

This move is a departure from the model followed up to now, one whereby print editions were involved – even if only for two days a week as was the case for some packages.

While this move seeks to grow the digital subscriber base, it also offers the opportunity of speculation about where the company sees print in its future.

Mediaweek has more on the story.

With over the counter print sales remaining in steep decline, separating the digital subscription offer from a print offer makes sense. I know of people who said they would not subscribe while they had to take print product.

Checking the Herald Sun website, the subscription price is $3.50 a week. This feels high to me, compared to digital-only subscriptions for other titles with which I already engage. Time will tell.

In addition to recently upgrading there apps for its capital city mastheads, News Corp. is provoking a better online experience. When I was on their website looking at subscription offers, this popped up…

This reflects a best-practice approach to customer service – making contact easy. The only point of friction is the limited hours of access to speak with someone. Online today = 24/7 availability.

From a traditional newsagent perspective, the digital-only subscription move by News Corp. is a message to not rely on print newspapers as one may have in the past. Sales are only hearing in one direction.

While it feels like a slow slide, at some point, when it commercially suits a publisher, print editions of newspapers have been and will be cut.

The News Corp. move shows a company maintaining the customer connection regardless of the method of connection.

I don’t begrudge News Corp. doping what they are doing. If anything, their move is late. The needs of their shareholders are well served by offering digital-only subscriptions as they now offer.

Newsagents need to:

  1. Chase new traffic to replace newspaper shopper traffic.
  2. Manage newspapers in the business to have the lowest operating cost possible.
  3. Locate newspapers as an impulse purchase more so than a destination purchase.
  4. Only do newspaper promotions if they are stand-alone commercially viable.
  5. Understand the money they make from newspapers and make business decisions accordingly. If you are making good money, embrace and support the product to make more.

In fact, these steps should have been taken years ago.

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Newspapers

The extraordinary reach of online sales for a newsagency focussed on the future

This map shows the delivery points of online sales from the last few months for a Victorian based newsagency related business. The average sale value is in excess of sixty five dollars, not including shipping, which is charged for at cost.

The map does not show click and collect customers, and there are plenty of them.

All of the customers are not local to the business, not regular shoppers of the business. They have all been won through direct online engagement, direct to the website as well as through Facebook marketing.

I share the image to reflect the reach this business sees it has. Whereas a coupe of years ago it saw itself as a local business serving people who walk past or live within, say, ten kilometres. Today, the business reaches way beyond, it reaches to all of Australia.

I appreciate there are newsagent who say online is not a big deal and that social media is not useful for driving traffic and revenue. Data do not support those arguments. The opposite is true, and especially true for tech engaged small business retailers including businesses that identify or have identified as newsagencies.

This is how we can grow our businesses, by reaching shoppers located far beyond our four walls, by being accessible 24/7, by selling what people want and fulfilling through a appreciated timely service.

Footnote: I call this a newsagency related business as it is related. But it is not a newsagency as many would see it, not any more.

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Newsagency management

Would you include returned magazines for which you have received a credit in the stock you sell with your newsagency business?

A newsagency business changed hands this year where the vendor included returned magazines as part of the inventory for which then purchaser paid.

The stock take was not undertaken by people skilled in newsagency business stock takes.

The solicitor for the purchaser had never aced for a client in the purchase of a newsagency before.

The accountant for the purchaser had never acted for a client with a newsagency business before.

On the shelves at settlement was thousands of dollars of stock of magazines for which the vendor had been given credit by their magazine distributor. The magazines were not topped. Some were nine months old, yet there they were, on the shelves, for sale to shoppers.

The expert in the transaction was the vendor. They are at fault here. They defrauded Gotch, and through them the magazine publishers. They deceived the purchaser, causing them to pay for stolen goods and, through their actions, encouraging the purchaser to sell stolen goods.

My advice to the purchaser was to engage a new lawyer, to pursue the purchaser, to consider pursuing their original lawyer and to advise Gotch formally of what was discovered.

Gaps in handling magazines allow unscrupulous operators to get away with crimes like those outlined above.

Gotch should verify all return claims. Publishers should demand it, and be prepared to pay for it. While I understand they do spot audits, which have found discrepancies that have led to newsagents paying compensation, that is not enough. The situation I have outlined above should not have been allowed to happen.

Every returns over claim should be caught.

Gotch and the newspaper publishers should consider working with the ACCC on an authorised process for handling the change of ownership of a newsagency business. This could ensure the stock take is undertaken by a registered, skilled and ethical stock taking business.

Sadly, it is not the first time I have heard a story like this and, I suspect it will not be the last.

It has been a tough baptism into newsagent life for the purchaser. Hopefully, they have learned to be more curious about situations they encounter in business for the first time and to have a healthy questioning about those they deal with.

8 likes
Ethics
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