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

Victorians respond to lockdown

I called around a bunch of retail businesses late yesterday, looked at data for my own shops and visited a Westfield centre and a suburban high street business where I have shops and did so within the rules.

Victorians are responding to the clear lockdown rules.

I saw shops that are not essential are shut.

Foot traffic in shops that are open is way down.

Shoppers are shopping quick, in and out.

In newsagencies, newspapers top the purchases followed by magazines. The gap between those two and cards and gifts is considerable.

While data I have are not enough for a reliable trend, from what I have been told and have seen, shopping centre newsagencies could be down as much as 80% and high street newsagencies down around 50%.

I expect numbers around this level to continue for the duration of the lockdown.

Victorian retailers tell me shoppers are, overall, reacting well, wearing masks, checking in, not loitering. While I’ve read some news stories of poor customer behaviour, no retailers I spoke with has stories.

The other good news from Victorian retailers is that click and collect, local delivery and posting to family services are all working well.

on a personal level, we have cut our hours back to lockdown hours. Opening 9 am and closing any time after two, depending on foot traffic. No trading on Sundays.

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Social responsibility

Recommended social media pitch if you are in lockdown

If you are in lockdown I recommend daily social media pitches featuring the front page of newspapers, including foreign language newspapers. This is a reminder that you are open and reinforces the essential nature of your business.

It’s the type of subtle post that could work well for you in the current conditions. It’s you reminding people without being pushy or offending owners of nearby businesses that are closed.

I have done it for my shops through each of the Victorian lockdowns and it has worked well.

I keep the posts simple and leave the newspaper itself as the hero.

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Newspapers

Suppliers of fixed price / margin products to newsagents need to look at our rising labour costs

In a few months, people working in newsagencies get a pay rise following the recent decision by Fair Work to increase labour costs under the Retail Award.

The challenge for newsagents is the product we sell over which we have no price or margin control. The impact of the challenge is intensified in businesses that rely more on low margin products like newspapers, magazines and lottery products.

Every time a supplier of fixed price / fixed margin decides to not increase price or margin percentage, they are saying to local small business newsagents to please take this hit for us, please absorb the higher costs in your businesses so that we can profit. Some suppliers go further – and follow our rules for if you don’t there will be commercial penalties … know your place!

The fixed margin and price situation leaves newsagents looking elsewhere for ways to fund the increased labour costs. While the best situation would be an increase in sales, for most, lowering costs elsewhere will be a focus.

Of course, the best situation would be not relying as much on low margin products in the overall revenue mix in your retail business. This is why, for years, I have written here about the need to range inventory focussed on attracting new shoppers to the business. The more you can grow the average GP% achieved in the business through products over which you have price control the better.

The solution lies in being a retailer in control of the business rather than being an agent.

Magazine publishers, newspaper publishers and lottery companies – yes, I am writing this for you.

Now, to any people at Nine Media patting themselves on their back for the 20 cent price rise to their capital city newspapers next week, stop it. The 20 cent cover price increase will give retail newsagents an extra half a cent, which is offensive.

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Newsagency management

Beware the lure of consignment stock in the newsagency

I get that being offered inventory on consignment is appealing. You only pay us for what you sell is a compelling pitch. The thing is, consignment stock takes space, it has to be managed, the products can be stolen and, the cost to the supplier of consignment is, I am sure, built into their price model.

I am not recommending against consignment. rather, I am saying think about it. There may be times the lure of consignment is not worth it. It all depends on where the product fits in your business and whether it advances your overall business objectives. For example, if the consignment stock is on a spinner and your floor is already full, why make it more cramped.

One thing Covid has taught us is that shopability matters. People like space, they want to be able to move around. We’re on a break from stack em high watch em fly.

My biggest consider with consignment stock is that it tends to be ignored by retailers and inventory that is ignored usually does not perform well in-store. My advice is that you manage consignment stock sales as if it is regular stock. Know what’s selling and what is not selling. There is no point in having your space and time take up with items that are not selling, designs you only paying based on sales.

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Newsagency management

Crosswords: the one magazine category you can count on

Crossword magazine sales continue to be strong in newsagencies. They grew last year through the early months of Covid and have performed well since.

The keys to success are range of types and titles, grouped location in the magazine department, plenty of full-face displays and customer service.

Crosswords are efficient in that crossword shoppers are more likely to purchase other items – they have a more efficient basket for the business.

Crossword shoppers are more likely to purchase jigsaws, pens and craft products. I say this based on newsagency shopping basket analysis. Plus, crossword shoppers actively encourage others to join them in their passion for crosswords.

My advice to newsagents is to check in with what you are doing re crosswords, look for an opportunity to do more, do better. The response typically will be a boost in sales, which we’d all like. Oh, and by more I mean: a refreshed display, co-location at the counter of some titles, pitching on social media, being active with what is placed next to crosswords and rewarding loyalty as the crossword shopper is likely to be your most loyal magazine shopper.

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crosswords

Taking the trade show experience to small business retailers

I am grateful to have participated in a tour of the new showroom display at ISAlbi a few days ago, getting to see hundreds of new products and find out about stories that can be told through the new ranges.

I took more than 400 photos. The next day, I filmed a one hour Zoom where those of us at the showroom walk-through spoke to what we say, commenting on items and exploring how to bring the opportunities to life in-store.

Once the Zoom video was completed I loaded it to a video platform for newsXpress members, so they could see the products in detail, hear the discussion and access the new products and collateral associated with them to drive sales.

This approach of collecting video and photo assets and packaging them in a form that retailers can access from anywhere and at any time, with appropriate security measures in place, is just one way the world is changing in the retail space, one way we, marketing groups and suppliers, are able to work together to bring new product opportunities to life for retailers.

What’s interesting about what we saw is the new product categories available for retailers as it is through these that we can find new shoppers, the lifeblood of retail. From home decor to art to garden to self care to fun to environmentally aware, the ranges are broad enough for a retailer to map out a year of buying, with designated drops, to enable the business to be regularly refreshed all from the one engagement based on what’s in the video.

Plenty of suppliers have found other ways of connecting with their customers and finding new customers. I think the extent of change in this space will challenge trade show businesses into the future.

When I was in the Albi showroom, I saw account managers hosting FaceTime visits with retailers, showing product through their phone camera.

Now, from a newsXpress perspective, it shares with newsXpress members the video we shot and then offers a shopper service for anyone interested, based on what interests retailers. This is underpinned baby budgeting, floorspace and ranging advice. These and related services play into the changes engaged retailers are leveraging. Covid kicked the changes off. Now, plenty of changes have stuck, because people have realised they work better.

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Newsagency management

What we learnt from the Victorian Covid lockdowns that could benefit NSW retailers

It was the second Covid lockdown in Victoria that was a defining moment for many small business retailers. Whereas first lockdown was a national experience, the second lockdown was unique to Victoria back then.

While there were many media stories about businesses doing it tough, the reality is that many of us had a good Covid, through all four lockdowns in Victoria. Here’s what worked for us and many of the local small business retailers I have spoken with:

  • Be safe. Have the perspex screens at the counter.  Place your credit card terminal on the customer side.
  • Be frugal. Spend what you must but hang on to as much cash as you can. You don’t know how long this will go on for.
  • Make shopping easier, safer. Bring what people will want the most to the front of the shop, to reduce browsing. In a newsagency where papers have been put to the back of the shop, for example, bring them to the front of the shop.
  • If you’re not online, get online.
  • Be practical. Now is not the time for pretty displays.
  • Preference card payment. The less cash you have to handle, the safer the business.
  • Be flexible. Be available for shoppers where they want to shop: online, on the phone, via social media. Offer delivery or curbsibe pickup.
  • Offer what they want. What people will purchase through a lockdown will be different to other times.
  • Bundle. People who want to send gifts will appreciate you offering bundles ready to be delivered or posted.
  • Co-operate locally. If you are open and a nearby shop is closed, maybe you could sell some of their stock for them.
  • Clean, clean and clean. Showing this being done builds confidence.
  • Be grateful. You will see many good deeds and hear about many too. Share them on social media.
  • Look after your team. Have a good supply of masks and anti-bacterial gel. Given them breaks to refresh and wash their hands.
  • Think about beyond Covid. The experience will help you see your business differently. Lean into that for opportunities on the other side.

Regional, rural and high street newsagents are likely to have a better lockdown than those in shopping centres. many Victorian shopping centres are yet to recover from lockdown 2 and beyond. I mention this as one consequence of extended lockdown for shopping centre businesses is to find opportunities outside the centre.

I have three physical shops in Victoria as well as an office and several online only businesses. What I have suggested in this post we have done in my businesses, and we continue to do them today. For example, as part of the be frugal advice, we made some decisions that we expected to be temporary, decisions we still follow today, decisions that continue to save money.

While things seem grim in NSW right now, at the local small business level you have an opportunity to make your own success, your own good situation out of a bad situation.

If your shop is open and not busy because people are staying at home, use the opportunity to make changes. Be bold, but frugal. Use the time, too, to plan for what’s on the other side – promotions, marketing, re-casting.

Footnote: through my work with newsagents and with the Tower POS software community more broadly, only a very few businesses did not make it through. I think this is because small business retailers are resilient and flexible, doing what is necessary. Good luck everyone!

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Social responsibility

Tabcorp ramping up text marketing?

Looking back on text messages from Tabcorp over the last couple of years and it looks like they are texting more now than in the past. And, while the text mentions in-store, of course you can’t be in-store in a click.

Text message marketing is very effective at driving immediate engagement. IOf the target has not bought and if a $20 first division prize is appealing, in a couple of click they can have a ticket and that’s what matters here.

Tabcorp are doing here what any shareholder would want them to do. They are doing what they have to to capture the impulse purchase. It is so much easier to click and purchase than walk or drive to the shops, front up and purchase over the counter. Indeed, much easier to do this today than a couple of years ago, pre Covid.

So, yeah, I understand why Tabcorp is texting people. I’m writing about it today so that lottery retailers understand.

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Lotteries

The keywords of shoppers: who is Frida Kahlo and why does she matter to us?

Frida Kahlo is an artist from Mexico, who lived from 1907 to 1954. Her art consisted mainly of self portraits. She is considered a feminist icon, and rightly so. Interest in her has grown in recent years through careful management of licences associated with her.

We have several suppliers to our channel with Frida Kahlo products. There are cards, journals, calendar, cushions, wrap and more. These are items bought by and for, primarily, women, 25 to 50.

This is why Frida Kahlo matters. But let me add to that. through search data, we can see that every day Aussies are search Frida Kahlo online. Here is current search data:

When I am considering Licenced product for my shops, I look at search data as it is real, current and accurate. It helps me assess the interest in this licence over another licence and that can sway my purchasing.

This research into online searches also helps determine the value of buying products from multiple suppliers for a licence. This is the case with the Frida Kahlo brand. The 12,100 searches for the specific brand are interesting. Expand the consideration to all associated keywords and you have 82,700 searches a month in Australia. That makes it a commercially viable brand. Also, thanks too the search data I can access, I can see the sites people go to for their Frida Kahlo fix, and this can guide how I represent the brand in-store.

All of this speaks to the importance of data in guiding retail business decisions. It also speaks to what we have to do in considering what to sell in ur shops. Retail is different today. We have more data available for decision making. We have more options, too, thanks to more suppliers selling to us.

What people search for online is valuable as we evolve our retail businesses. It reveals more to you than you can know from those walking into or past your shop. It’s powerful data, and accessible data. It is vital that we tap into it, to understand opportunities, especially for Licenced product, like Frida Kahlo, which may have not been on our radar in the past.

Whereas previously we’d worry about the range of pens we had, the six of magazines in a category, our birthday card mix or some sub-$20 gift lines, today brand or licence driven retailers are able to broaden their appeal by sensitively tapping into respected brands that stand for something, by sourcing deeply into the brand across multiple suppliers.

It all starts with accurate search data. tap into that and you can tap into a well of new shopper traffic.

This is what the newsagency of the future needs to do – pursue growth through data.

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newsagency of the future

newsXpress marketing

In March this year newsXpress published a 50 page book, Achieving more, together.  in which it set out what newsXpress offers its member newsagents and how, specifically, newsXpress helps newsagents evolve their businesses, to find new shoppers and to run businesses that grow in value and relevance.

I wrote this book as I wanted to lay out in one place the what, why and how in relation to newsXpress and its mission of service for newsagents.

The reaction has been terrific. It’s wonderful seeing newsagents want to make their businesses more valuable.

The book was posted in March to 500 newsagents in hard copy while a soft copy version was provided to more. If you’d like a copy, please email me.

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newsagency of the future

All eyes on the CBD

Capital city central business districts are confronting challenges in attracting shoppers. With plenty of city office workers not returning to the office, everyday shopper traffic is down. This presents a challenge for retailers.

Rather than dealing with the change and a long-term change, because that would be tough to do, some city administrators are investing to try and lure people in.

Melbourne, for example, has launched council subsidised discount parking and a state government and city council funded dining voucher that provides a rebate of up to $100.

While these types of cash related campaigns are interesting, I don’t think they will solve the issue for the issue is structural. The pandemic has shown many people an alternative they had not previously considered.

More people are working from home permanently, reducing weekday core foot traffic in the city.

meanwhile, retailers in regional Australia continue to do well.

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retail

ACCC interest in Are Media takeover of Ovato Retail Distribution

This letter outlines what interests the ACCC in its consideration of the takeover of Ovato Retail Distribution by Are Media:

Dear interested party,

Request for submissions: Are Media Pty Limited’s proposed acquisition of Ovato Retail Distribution Pty Ltd

The Australian Competition and Consumer Commission (ACCC) is seeking your views on the proposed acquisition of Ovato Retail Distribution Pty Ltd (ORD) by Are Media Pty Limited (Are Media) (proposed acquisition).

Are Media is the largest magazine publisher in Australia and ORD operates the largest retail distribution network for print magazines in Australia. Further details regarding the acquisition can be found at Attachment A.

The ACCC’s investigation is focused on the impact on competition. In particular, we are seeking your views on:

  • The presence of alternative retail distribution networks for print magazines, and the ability for customers to switch between alternative retail distribution networks.
  • The likelihood of a price increase for retail distribution of magazines if the proposed acquisition proceeds.
  • The ability and incentive for a combined Are Media/ORD to foreclose or discriminate against competing magazine publishers seeking retail distribution services.
  • The extent that the magazine industry is in economic decline and if so, whether the industry is likely to recover in the next three years.
  • The potential expansion of existing distribution networks (for example, newspaper distribution) into the retail distribution of magazines.Further issues you may wish to address are set out in Attachment B.
    This matter is public and you can forward this letter to anybody who may be interested.

The legal test which the ACCC applies in considering the proposed acquisition is in section 50 of the Competition and Consumer Act 2010. Section 50 prohibits acquisitions that are likely to have the effect of substantially lessening competition in a market.

Please provide your response by 5pm on 8 July 2021. Responses may be emailed to mergers@accc.gov.au with the title: Submission re: Are Media/ORD – attention Sophia Liu / Will Sommers. If you would like to arrange a time to discuss the matter with ACCC officers, or have any questions about this letter, please contact Sophia Liu on (03) 9290 1437 or Will Sommers on (03) 9910 9444.

The takeover presents challenges for newsagents, independent publishers and consumers. It will be interesting to see if there are submissions on these matters.

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magazine distribution

Tabcorp announces plans to de-merge lotteries

Tabcorp this morning announced plans to de-merge the lotteries and keno business from the gaming company.

This move, which is expected to be completed mid 2022, would result in an organisation more focussed and reliant on lotteries revenue. I suspect this would see pressure on the retail network increase.

With digital sales accounting now for 32.1% of lotteries revenue, smart management would be focussed on driving digital sales as I suspect the cost to the business of digital sales is less than the cost of over the counter sales.

To any retailer who asks me I say – don’t run your business such that it is reliant on lottery revenue for survival. The less you rely on lottery revenue and lottery shopper foot traffic the brighter opportunities for your business.

The bottom lime of today’s Tabcorp announcement is continued disruption for lottery retailers.

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Lotteries

Reed changes Melbourne Gift Fair date, causing a clash of trade shows

Reed announced this morning that the date of the Melbourne gift fair will change.

Reed Gift Fairs Melbourne will now take place on 17-19 September 2021 and will be co-located with Life Instyle.

RX (Reed Exhibitions), organisers of Reed Gift Fairs and Life Instyle, will continue to monitor the situation closely as it evolves. Our number one priority is the health and safety of our exhibitors, attendees, industry partners and staff and we will continue to act on the expert advice from the Australian Government Department of Health and local health departments.

We fully understand and appreciate the level of planning that is required to participate in an event like ours and we will do our utmost to help all our customers, partners and attendees to prepare for the new dates.

This has frustrated Expertise Events as it competes with the date of their Sydney fair:

It will be interesting to see how all this plays out.

Smart suppliers have learnt how to run their businesses such that they no longer rely on trade shows.

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Social responsibility

Looking under the hood at the Ovato operation

Details loaded to the ASX website Friday provide an insight into Ovato, its magazine distribution operation and the outlook, more broadly, for magazines.

It’s worth reading the whole document as it presents a perspective of the Ovato business that could be different to how you see it from within your local newsagency business.

Further in the letter is this in relation to Market Hub:

Newsagents who want to comment on the proposed takeover of Ovato Retail Distribution by Are Media have until July 8 to do so. Click here for details.

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magazines

Under-award cash payment of employees without a payslip is illegal

I received a call Friday from someone saying they are working at a newsagency and being paid cash in hand, without a payslip and at a rate that is 25% lower than the award.

They were asking for help. I gave them the phone contact details for Fair Work and urged them to make immediate contact. I also gave them the link for an anonymous report.

There is no excuse for systematic, deliberate, underpayment of employees nor for payment by cash without a payslip.

As we have seen in the conveyance, fuel and hospitality spaces, the actions of a few can tarnish perceptions of a channel.

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Ethics

NSW government prefers to be half-pregnant with covid ‘restrictions’

The NSW Premier has said it’s not a lock down, rather, that it’s a stay at home order, and then pleaded for common sense.

A week on, we can see how that is playing out. Not well.

The NSW Chief health Officer today told people in NSW that retail was a problem setting for them:

While NSW and their federal friends have been quick in the past to criticise the stronger and more restrictive lockdowns in Victoria, history has shown that they work.

Retailers are told in NSW by the government to be open and that staff can cross Covid borders to get to and from work, but now they say the retail setting is problematic.

Hmm…

4 likes
Social responsibility
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