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

Gordon and Gotch moves into gift wholesaling and fails to adhere to data standards (with the help of XchangeIT)

Earlier this month, Gordon and Gotch launched The Market Hub, a wholesale business offering toys, gifts and other items.

In my opinion, Gotch should get its magazine distribution business right first. There are too many mistakes, too much oversupply, poor newsagent customer service and a poor tech platform through which newsagents connect.

As I have noted previously, Gotch could grow magazine sales for publishers by providing better service to newsagents, through a better tech platform. Indeed, the poor Gotch tech interface is a big barrier to newsagents taking on new titles.

There are items offers by Gotch through The Market Hub with a suggested retail price that is higher than the original supplier suggested retail. This potentially sets the participating newsagents as expensive and creates a false margin perception in my opinion.

Some items in the Gotch offer need understanding and support to drive sales success. Simply purchasing product and stocking it is not enough for such items.

FAILURE TO ADHERE TO DATA STANDARDS.

It is in the data side where I have concerns with how Gotch has gone about the launch of The Market Hub. Gotch sent to newsagents an EDI file using a format designed for magazine data. XchangeIT passed through the file, without testing.

The file contained errors. Gotch and XchangeIT people were clueless and, in my opinion, disengaged. It fell to the COO of my newsagency software company to detail the errors in the Gotch file sent by XchangeIT.

A big challenge was that Gotch was the supplier. The way the standard plays out is that having one company provide data for two very different types of products through one file format is problematic. yet, for several days, Gotch and XchangeIT resisted establishing a second supplier for Gotch to send through their data for The Market Hub. 

While I don’t know about other software companies, XchangeIT agitated my newsagency software company, Tower Systems, to change its software to serve the approach Gotch and XchangeIT wanted to take. What this meant is they wanted me to personally fund, to the tune of many thousands of dollars, changes so they could bend XchangeIT data to work with standards not designed to accomodate the data they wanted to send.

I made it clear to them that out of all of us at the table, Gotch, XchangeIT and Tower, only I was being asked to personally fund any work. I refused. Instead, Tower outlined an approach they could take with no cost – by sending the data from a separate supplier.

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.

What should Gotch and XchangeIT have done differently? They should have engaged the software companies before sending the file. They should have followed the standards. The should have established a separate supplier for this new Gotch business. They should have thoroughly tested the data they sent.

Instead, they worked in secret and rush to newsagents flawed data, compromising the integrity of the data standards that XchangeIT ferociously protects when it comes newsagent data. It is a pity they are not as tough with themselves and Gotch as they are with newsagents.

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Ethics

Newsagency management tip: understand what insolvent trading is

A business owning three newsagencies went broke months ago, owing close to two million dollars. The liquidators report was released recently, declaring that the business had been trading while insolvent for at least two years. This finding could have serious consequences for the directors.

ASIC defines insolvent trading:

An insolvent company is one that is unable to pay all its debts when they fall due for payment.

Yes, the definition is that simple. The director of the company to which I refer above was a blowhard, a gunna my mother would have called them. Gunna do this or that, with an attitude that they were an amazing business operator. Except, they were not. Many suppliers to the channel were left out of pocket along with banks and the ATO – and through the ATO, all Australians.

In my experience, often, the louder someone is about how great they are in business the worse they are.

ASIC provides advice on what to do if your company is insolvent:

If your company is insolvent, do not allow it to incur further debt. Unless it is possible to promptly restructure, refinance or obtain equity funding to recapitalise the company, generally, your options are to appoint a voluntary administrator or a liquidator. The three most common insolvency procedures are voluntary administration, liquidation and receivership.

ASIC has plenty to say on insolvent trading, including:

If dishonesty is found to be a factor in insolvent trading, a director may also be subject to criminal charges (which can lead to a fine of up to $220,000 or imprisonment for up to 5 years, or both). Being found guilty of the criminal offence of insolvent trading will also lead to a director’s disqualification.

ASIC has successfully prosecuted directors for allowing companies to incur debts when the company is insolvent, and has sought orders making directors personally liable for company debts. ASIC also runs a program to visit directors, where appropriate, to make them aware of their responsibilities to prevent insolvent trading.

If you think you may be insolvent, reach out to someone you trust for advice and to be by your side as you navigate the challenges.

The newsagent in my story did not want help. They said there was no problem.

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Ethics

Newsagency marketing tip: pitch Kris Kringle gifts

Right now is the time to pitch Kris Kringle gifts. These are gifts that usually focus on fun and sell for anywhere between $10 and $50.

We are enjoying terrific success with a range of fun gifts right now, for workplace gifts. Starting in a week or so we will focus more on heartfelt gifts, for family Kris Kringle gift opportunities.

FYI, this beer popping candy has been a hit!

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Gifts

Officeworks actively promoting 2018 school books business

Go into any Officeworks store and you are greeted by their school books pitch for the 2018 year. Their pitch is simple and compelling: save time and save money.

Right now, this is the pitch newsagents need to be making if they are in a competitive situation for school book orders for the 2018 year. The two are easy to pitch. The first is about ease of engagement and the second is about margin.

Given how Officeworks sells, it is tough to beat them on price for everyday items. It is in special interest areas where you have your best opportunity.

In terms of ease of engagement, you can take practical steps to ensure this is what you do.

Now is the time, however. If you want school book business for the 2018 year, now is the time to be pitching. Taking a lead from the Officeworks focus is smart, but in your own style, with a local focus and with a value-add that could be unique to your business.

If you are looking for school books / booklist business in 2018 and not already pitching for this  business, you are behind, get to it, NOW!

Note: you don’t need to be near them to see them as a competitor, for Officeworks is everywhere thanks to engaged online campaign.

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Stationery

Simson cards releases same sex marriage cards

Kudos to the folks at Simson for being out early, yesterday, with same sex engagement and marriage cards. They have a terrific range that is already being pitched to retailers. Beyond the good news at the imminent removal of discrimination, new marketplaces have opened and opportunities cities for our businesses will abound.

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Greeting Cards

Statement from ALNA on ban on lotto betting

ALNA released this statement yesterday on lottery betting:

Ban on betting on Australian lotteries a step in the right direction

New ban demonstrates the problem with synthetic lotteries and the need to protect consumers and small business.

FOR IMMEDIATE RELEASE

Australia, 15 November 2017: A ban on betting on the outcome of Australian-based lotteries is a positive move in addressing the problem of synthetic lotteries and its threat to consumer protections and ethical conduct, according to the Australian Lottery and Newsagents Association. The Association is continuing its call for the Federal Government, in coordination with State Governments, to legislate against any operation of synthetic lotteries in Australia.

The move by the NT Attorney-General Natasha Fyles to ban bookmakers licensed in the Northern Territory from accepting bets on the outcomes of Australian-based lotteries, demonstrates that there is a serious problem with synthetic lotteries.

There is still a need for Federal Government intervention, in coordination with the states, to protect consumers and the Australian businesses that contribute to our economy.

Adam Joy, CEO of the Australian Lottery and Newsagents Association (ALNA) said, “We are pleased that the Federal Government and State Governments, in particular, WA, NSW and Tasmania, have worked together to address this issue and to deliver this important first step towards an overall ban.

Consumers will still be bombarded with potentially misleading advertisements for these risky betting products that are lacking certainty around payout figures. And they will still be lured into profiting a highly unethical business, including at the expense of news and lottery agents.”

The Federal Interactive Gambling Act makes it illegal to have online scratchies and online pokies, and it should also ban online betting on lottery outcomes.

“The facts are that Lottoland is under pressure because it has chosen to operate as an online bookmaker that poses as a lottery, outside of the much tighter regulations, consumer protections, and higher taxes that official regulated lotteries adhere to.

“It has attracted criticism because it allows consumers to be misled in a number of ways, and the bookmaker uses concerning tactics to attempt to hijack customers from news and lottery agents.

Synthetic lotteries are a matter of national concern, and this decisive action is a positive step towards the urgent action needed to address lotto betting in Australia,” continued Mr Joy.

–       ENDS –

What is the difference between Lottoland and official regulated lotteries:

Lottoland is a wagering website that sends bets overseas, with customers betting on the outcome of lotteries. More colloquially known as lotto bets (synthetic/fake lotteries), these online-only bookmakers are different to official regulated lottery draws.

They do not offer tickets in a draw, rather they draw from regulated lottery businesses and offer bets on lottery outcomes, relying on complex insurance linked securities to pay any winners (there has only been one million-dollar prize recipient, compared to official lottery’s 253 millionaires in 2016).

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Ethics

Is this ad from Lottoland on Facebook misleading?

Take a close look look at this ad that appeared on Facebook yesterday. It appears to be pitching a $41 million Tuesday lotto game. What it was actually pitching was a bet of the numbers selected by the OzLotto game.

If you click on the link it takes you to the Lottoland page where you can place a bet on the outcome of the lottery. This is why I question whether the ad as shown on Facebook is misleading.

At the very lease the text should say: You could win a prize by betting on the outcome of the numbers drawn in Tuesday’s OzLotto jackpot. But, of course, that exposes their product for what it is, a bet, not a lottery ticket.

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Ethics

The value-add purchase that drives magazine sales

This Pacific Magazines value-add purchase supporting several of its titles and exclusive to newsagents in the nexus marketing program is terrific. It will sell out.

There are multiple layers to the promotion we can leverage to maximise the opportunity, beyond the usual magazine focus.

There is a counter unit for pitching the amazing value Model Co. make-up products. This can bounce people to the magazine.

The there is the excellent social media collateral that is ready to use, making pitching the offer on our social media pages, something we can do in seconds rather than minutes.

The folks at Pacific have put a lot of thought into the campaign, giving us an offer that is compelling and supporting g it with materials we can leverage to make it work for us.

This is much better than asking for an aisle-end display that only leverages in-store traffic. this is the type offer that we can use to bring in new traffic or shoppers who do not shop with us frequently.

It is especially useful where one competes with supermarkets, as they will not have this offer.

I have dived right in, promoting this on Facebook and in-store, making the most of it at every touchpoint possible. I don’t often do this anymore with magzines. This offer, however, is different, well worth promoting. I want to sell out, early.

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magazines

A question from a newsagent

A colleague asked me to pose a question here, related to the photo below of a shopper docket from Woolworths. Why do we continue to sell newspapers?

There is no doubt that print is not a model for the future distribution of access to news or long form journalism. The only barrier to its closure today is the lack of a viable alternative mad revenue model for the publishing companies.

That said, plenty have transitioned to digital, some with good success.

These deals like at Woolworths are all about slowing the sales decline, to bowler ad value in the print product.

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Newspaper marketing

Marketing tip: photograph to a story

When photographing products for use on social media, photograph to a story. Ic you do this you will achieve better engagement. The best story brings together multiple items in a single shot. Here is a good example. My text for this photo would be Happy Monday or Inspiring or Desktop support or Portable inspiration.

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marketing

Management tip: track what you put into hampers

If you create and sell hampers in your retail business, use your software top track what is in each hamper and create a barcode unique to the hamper. This enables easy tracking of each individual item sold as well as the hamper sale. This is vital for tracking the performance of the hamper side of your business.

The software will also allow you to reverse any hampers made, retreating the hamper data back to the single items that made it up, should it not sell.

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Management tip

Customer stories brighten the day in retail

Some days, customer stories brighten the mood in the shop, and at the sales counter especially. I love it when people tell you why they are buying a particular product, especially if you were unsure as to who the customer for the product might be. This direct customer feedback can help you sell more of the item through more informed targeting.

This desk name plate is a good example. It is funny, very in-your-face. I have seen it bought several times now and in each case the reason was shared, and inn each case the shopper was different. The feedback has been useful in guiding social media posts designed to help connect with others with a similar need or interest.

While customer stories at the counter can take time and interrupt workflow, they can also provide valuable shopper feedback, which you can convert to revenue down the track.

The challenge is how to engage with shoppers in a time efficient way at the counter. It takes practice as you don’t want them to feel you are not interested.

For the record, I saw this name plate purchased by a wife for her husband, by a son for his mum and by a work colleague to leave secretly on the desk of their boss. The last story was especially intriguing. They say they will back with a report on how its was received.

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Newsagency management

Gotch and XchangeIT fail newsagents, again

Gotch, not content with its broken magazine distribution business, has branched out into supplying gift related product to newsagents. Some of the products have suggested retail prices that are higher than supplier suggested retail, giving an inaccurate impression of margin.

XchangeIT has sent out a invoice file from Gotch for this new gift product venture that is riddled with errors. The experts at XchangeIT were clueless about the file they sent. They had not checked it.

An expert at my newsagency software company checked the file and listed for XchangeIT the problems in the data from Gotch that they sent through their facility. This was done because XchangeIT people were too lazy to do they work they should have done.

XchangeIT take a big stick to newsagents on compliance yet appear to accept no responsibility for their own lack of compliance.

XchangeIT has one job. They failed.

Gotch should have one job – distributing magazines based on what will certainly sell. They fail weekly.

People in both companies will be angry that I am writing this, they will have their excuses. In  my opinion, the excuses will be baseless.

If Gotch has the time and money for a new venture they have the time and money to stop gross oversupply and to stop the distribution errors that cost newsagents a ton of money.

If XchangeIT can send out a data file riddled with errors and that they have not tested they have no right penalising newsagents on their compliance.

22 likes
Ethics

Tatts changes new shoplift deadline, again and again

Tatts has issued three shift deadline extensions in recent weeks. Here is one announcement from a week ago:

You were initially required to have the Generation One DigiPOS Retail Image installed at your Outlet by 30 November 2017, however an extension has been granted to 30 November 2018.

Here is an announcement from yesterday:

An email was sent to you on Friday 3 November 2017 stating the requirement to have the Generation One DigiPOS Retail Image installed in your outlet by 30 November 2017 had been extended to 30 November 2018. This was incorrect.

The extension has been granted to 30 June 2018. We apologise for any confusion this may have caused.

In addition to the timing changes, there are changes to the actual look to be installed. This is sure to leave a mixture of looks out there, making a mockery of their pursuit of a consistent corporate image.

It still bothers me that they call this a DigiPOS Retail Image. It’s not. there is the image and then there is the digital marketing platform. Two different things with the latter being new capex for which tatts is yet to provide any business case and for which any business that has undertaken the works is yet to provide evidence of commercially viable revenue increase.

This post relates to my more beef about Tatts – the capex they demand of retailers in this world where there is undeniable migration  of lottery purchases to online. Tatts need to migrate purchases online, I get that. They should, in retail, contain costs for small business retailers and require them in the context of over the counter only and not online.

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Ethics

Shoppers loving personalised Christmas baubles

The personalised Christmas ornaments released by newsXpress through its stores have been selling very well.

What is most interesting is that 90% of all the many names ordered are unusual names, names you would not see on any named product stands released by traditional name product suppliers.

Shoppers have been happy to pay up front and return to collect their personalised baubles once made.

This is incremental sticky business. I label it sticky because it causes a return visit and because it gets the shopper thinking about what other personalised items the store can source. This is a big question for people with family and friends with unusual names.

These baubles are an example of one way we can make our own success, literally. They are something the majors do not and will not do.  The margin is excellent. The simple counter pitch is effective.

At the back end, the whole process is tech driven with no paperwork involved. A purpose built website is used by the engaged retailers. This also facilitates useful data analysis, to better inform other developments in this personalised space.

This personalised bauble initiative is part of a larger piece of work in this space being driven by newsXpress for its members, as part of an overall new traffic campaign.

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Gifts

The impact of the Tatts digital marketing screen in one newsagency

Here is a message from a newsagent in a business that installed the Tatts required digital marketing platform.

Since we installed the Tatts demanded technology sales have declined. Syndicate sales especially have fallen.

Yesterday, we were stuck with 6 syndicates worth more than $120.

Since the refit, syndicate sales have cost us around $1,000.

Before the refit, we sold out.

This is a direct result of the refit, we previously maybe had to be an odd share rarely… our syndicates are usually sold out well before.

There solution to this problem when we raised it with them was to print out more posters and stick up!!!

After their amazing refit, we still have to print out posters which clearly are ineffective too!

If this was me I;d explore a class action as tatts demanded I invest in their technology with the promise from them it would increase sales.

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Ethics

Look at what is broadcast on the Tatts digital screens that fail to deliver sales boost

Tatts has demanded retailers install digital marketing screens at the counter, without a business case but with the claim sales will increase. Experience is showing no such increase for the stores forced to install the screens so far.

I stood at a counter yesterday and filmed for a minute, longer than most customers wait, to see the pitch. here it is.

This is a failure by Tatts in my opinion, for which many newsagents who have installed the screens so far are paying dearly.

If I was forced to install the screens by Tatts and if they were not delivering any benefit I would lodge a claim for compensation. Such a claim would include with state claims tribunals, state and federal small business commissioners / ombudsmen as well as with the ACCC through the Franchise Code of Conduct process. I would be seeking financial relief from Tatts. I would also talk with a legal firm that specialises in class action.

Note: I added the music to the video to mask shop noises.

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Lotteries
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