The Age and the SMH today offer up How a German media company brought Australia’s greatest magazine empire to its knees, a deep dive into the Bauer family’s impact on the once great ACP magazine empire and the wreckage it left. It is worth the read for the reminder of history, the (finally!) acknowledgement of what a stuff up the Bauer influence has been in Australia. It ends on a note of hope for a brighter future.
What has happened in Victoria this week as a result of the spike in COVID-19 cases has been a challenge. I say this as someone living in Victoria and with several businesses based in Victoria.
Whereas since march, we have all been in this together, now some postcodes are in and others are not. The tougher lockdowns in some postcodes have resulted in challenges outside those postcodes.
Major shopping centres have seen a sharp decline in shopper traffic and this is playing out at the register with sales down 50% and more from early in the week. That decline is playing well for high street retailers with most I have spoken with experiencing steady and even slightly up sales.
Jigsaw sales are up again as are other categories such as nesting.
While some in other states have made fun of Victoria, the reality is we are beta testing living with corona for the longer term. By beta testing mean we Victorians are working out how to live with this for the longer term.
The reality is that due to mixed messages from shouty media and plenty of politicians on all sides, it makes sense that people became complacent. What we have seen is that complacency is dangerous, it has consequences.
Social distancing is key. Washing hands matters. Using hand sanitiser is important. Keeping a clean and well organised shop is our responsibility. Health and safety barriers at retail counters are important. Seriousness about health is core. Discipline and commitment to these things is what life in this corona world until there is a vaccine is what matters.
From a business management perspective, we have learned that the corona lockdown months are the new normal and that we need to adapt our businesses. Some of what we have experienced these months is sticking. More businesses are adopting for the long term lockdown changes, such as working from home.
In all of these moves there are opportunities for local retailers.
The infection spike in Victoria has been a timely reminder that March through June were not a blip. No, they are experiences we in business need to leverage for all those who rely on our businesses for income and support.
The mantra from March is relevant today: be frugal, hoard cash, make safe business decisions, ensure that every person in your shop needs to be there.
If you feel disconnected with what has been happening in Victoria, know that you are one person away from experiencing this where you are.
Newsagents in the UK are angry that News UK has increased the newspaper cover price and cut newsagent margin. Better Retailing has the details:
The NFRN has said “enough is enough” on newspaper margin cuts after News UK increased the price of The Times, but introduced a 0.5% drop in percentage terms for retailers.
From today (6 July), the cover price of Monday-to-Friday editions of The Times have risen by 20p to £2, while the margin for retailers has dropped from 21.5% to 21%, bringing the margin in line with the title’s weekend editions.
Its weekend titles will also increase in price, with the Saturday edition rising 20p to £2.20 and The Sunday Times moving up to £3. However, margins will be maintained at 21%.
This is an appalling move by News UK and one that should capture the attention of Australian newsagents.
The margin percentage cut and the cover price increase play on each other to intensify the financial hit to retailers including small business newsagents.
News Corp. in Australia is on a mission to cut operating costs and improve their own financial position as much as possible. Newsagents have seen this through the change in treatment of margin in recent years, closing of newspapers, changes to distribution arrangements and more.
UK newsagents are known for being strong and swift to act when they are wronged. I expect there will be considerable push back against the News UK move.
News UK is not alone in having on cover price and retailer margin in the UK:
HOW TO KILL THE NEWS TRADE BY @REACHPLC! Another 10p increase cause the greedy shareholders want more! Plus the unprofessional Publisher have under handedly Cut Newsagents terms without having the balls to be honest, yes truth always hurts! pic.twitter.com/iypL7xEmKq
— HNDA Delivers News (@hndanews) June 7, 2020
Newspaper retailers can make their decisions as to what they stock. I know of newsagents who have decided to not stock newspapers because of the declining percentage of gross profit and because of declining sales. One I spoke to recently said that even though customers ask about papers almost daily, not offering reduced a key personal stress point for them.
They have pitched to their 17,000+ Twitter followers. It’s good they call out newsagents.
We’re back for another week. $5 at all Vic newsagents plus @Coles and Coles Express outlets. Every club, every game, all the key stats. #essentialreading #aflbluessaints @1116sen @AFLNation @Crocmedia pic.twitter.com/xYOyLo4Gt2
— AFL Record (@AFLrecord) July 1, 2020
It was interesting to hear via the BBC that bookshops in Russia had been asked, encouraged to stock the new Russian constitution prior to it being adopted by vote in the country.
Talk about taking up retail space with something dry and for diehards.
On top of corona challenges, small business newsagents are confronted by channel-specific challenges right now because News Corp., Tabcorp, Ovato and others are letting them down on basic business communication.
Ovato made magazine distribution changes in NSW/ACT and even this morning there are newsagents unsure of when magazines will arrive and where they will be delivered.
News Corp. closed papers and changed distribution arrangements and there are Queensland newsagents a week on still not getting papers until close to lunchtime.
Big supplier businesses need to do better if they are genuinely interested in small business retailer business. I suspect their major customers, like the supermarkets, will have received better and more regular communication.
If their comms is anything to go by, they don’t value small business newsagent business in the medium to long term. Maybe that is the message.
News Corp. is taking over delivery of newspapers for Ovato, starting from tomorrow. As of right now arrangements have not been put in place by Ovato, leaving newsagents up in the air as to arrangements.
One newsagent I have spoken with has staffing arrangements to organise. Another I spoke with has keys to hand over for secure delivery of magazines.
Here we are, hours away from the change and nothing is organised. Someone is responsible for this, responsible for the stress being felt by newsagents, responsible for what tomorrow might look like if the current lack of arrangements plays out.
The decision by Ovato was announced weeks ago. The have had time to get this done right. Even if they call newsagents this afternoon, it is too late, rosters were set last week.
What a mess.
Footnote: as I noted a while back, I think there will be consequences for newsagents from the decision by Ovato to use News Corp.
Earlier this morning I advised Ovato of what appeared to be an issue with some invoices not including GST. The head of client and retailer sales for Ovato has now responded:
From our investigations we are aware of some DD2 file being sent without GST. We believe this will not impact the retail price that includes GST so stores will be scanning at correct price tomorrows magazines. We believe this will impact the PoS finance side and are currently reviewing all DD2’s sent for tomorrow’s on-sale to identify the ones without GST. We are then planning to resend these DD2 files with the correct GST. Please confirm for Tower agents this will be ok.
We are also speaking to XIT to let them know of the error on some DD2 files.
We also now know the reason why this happened and can confirm this will be fixed for future on-sales.
My newsagency software company is emailing customers with advice on handling this, to mitigate against data errors.
I posted this on the Facebook pages for my Victorian businesses and the newsXpress national Facebook page.
Hey Victorians, we hope you are safe. All our locally owned newsXpress stores in Victoria are open and safe, here to serve you with news, awesome cards, jigsaws, games and gifts. We can arrange easy pick-up. Some of our stores can arrange local home delivery.
While it is frustrating being the butt of jokes from other states, corona is invisible and will spike in other places too. This week and next we Victorians get to show the rest of the country how to deal with a second wave.
Be well and happy! xx
I share it here as other Victorian retailers may wish to post their own messaging early in this period a surge of corona infections. I felt it was better to be on the front foot about this given the wall to wall coverage in the news and given how some media outlets outside the state are speaking about us.
Dan Andrews, the Premier of Victoria just announced a return to stage 3 lockdown for some Victorian postcodes in response to COVID-19 infections.
The return to stage 3 lockdown presents challenges for residents and businesses in these areas. Newsagents, based on past experience, will be exempt. High street newsagents in particular will see foot traffic changes as the shopping malls empty out, which has started already.
Click on the image to see the full statement by the Premier. I have shared it here as I suspect news outlets will not run the full statement.
Related, earlier this week I announced to people working in my own office-based businesses that I anticipate we will continue our work from home approach for most through to the end of this year at least. The feedback I had was that people wanted certainty.
90% of our workforce is working from home with Microsoft Teams, Zoom and our VoiP phone system key to maintaining contact and productivity.
IGA has announced a new free newspaper offer for News Corp titles for customers spending $20 or more July 1 through July 28. I know newsagents with an IGA a door or two away who will be frustrated with this. News Corp. loves these free newspaper deals.
These deals feel like they are all about driving subscription sales and not on going over the counter purchase.
I doubt we will get papers today.
They don’t care about regional Queensland.
It’s a joke.
News Corp. Is killing our newspaper sales.
Plenty of newsagents in Queensland are angry at botched and late deliveries by News Corp. Hearing about late and entirely missed deliveries from regional newsagents, in towns where a paper with local news still matters, is heartbreaking. Customers are angry too.
This is the last time I try and buy a paper at the newsagents.
Haven’t you paid your bills. (On seeing no newspapers)
I came all the way into town to buy a paper. It’s 10am. (Yelled)
One newsagent contacted News Corp. to discuss the delivery route, to try and get papers to their shop before 11 each morning and the News Corp. response was could you create a new route for us to follow because you know the area better than us. This might have been a reasonable position if the company was preparing for the changes. It is unacceptable from the company after their changes, controlled by them, have been implemented.
By any measure, what News Corp. is doing with regional newspaper delivery in Queensland is a mess. Regional and rural locations are missing out, and, from what I can tell, the company cares less.
It’s like they want this to fail.
I wonder if the newsagent who said this is right.
The reality is that newsagents make too little from newspapers to invest time in resolving the problems caused by the News Corp. newspaper distribution changes. Some have questioned whether quitting papers altogether is what they should do rather than putting up with the mess created by News Corp. This is not made up, there are newsagents discussing this.
What a mess by News Corp., a company that invests heavily through various platforms telling Australians and Australian governments what to do. Here they have demonstrated inability to properly and professionally manage their own backyard.
News Corp. controlled the decision making and the timing of implementation. The closure of regional papers and the merging of limited local news in remaining times are decisions the company made. It has only itself to blame for the mess, the anger of customers and the utter frustration of newsagents.
The company needs to urgently resolve the situation and to considerably improve its communication lines for retail and distribution newsagents. Again, that this is being asked for after the implementation of the changes is core.
What a mess.
I am grateful for the insights from the latest confidential Toy Association sales data, which is based on May toy sales in Australia. The results reflect what I have seen in newsagency data for the month and the trends in toy businesses are those experienced by newsagents actively engaged in this overall product category.
Through my work with newsXpress I first spoke of opportunities in toys, games and jigsaws five months ago, in terms of sales and the need for broad supplier engagement. Newsagents who were in the space did well as did those who pivoted.
Toys continued to record strong results as May recorded double digit dollar and unit growth. In May, Australia was the fastest growing country in dollar sales +42%, followed by U.S +36%. All 13 supercategories posted dollar growth in the latest month, but only 12 supercategories had double digit growth:Building Sets(+26%), Infant/Toddler/Preschool Toys (+38%), Dolls(+63%), Outdoor & Sports Toys (+71%) , Games/Puzzles (+51%), Vehicles (+53%), Plush (+46%), Explorative & Other Toys (+39%), Arts & Crafts (+47%), Drawing & Craft Supplies (+46%), Youth Electronics(+84 %), Bicycles (+37%). Action Figures & Accesssories was the only category that had single digit growth.
These insights are tremendously valuable to retailers who make business decisions based on data from their businesses and channel-wide data. They reinforce the importance of newsagents playing in categories in addition to the five pillars of tradition: lotteries, papers, magazines, cards and stationery.
Compared to YTD April, YTD May saw 3 additional supercategories growing. Plush, Infant/Toddler/Preschool Toys, Explorative & Other Toys were the 3 additional categories. Building Sets continued to be the largest dollar gainer in the latest YTD and accounted for 32% of total dollar gained followed by Games & Puzzles at 26%.
We can bank on outcomes form leveraging this and other solid data, including trend data from our own businesses.
It does surprise me that there are newsagents yet to embrace games, toys and puzzles. While while what each newsagent stocks is up to them, the evidence of growth opportunities cities in this space have been documented here and elsewhere for many months now and there is no trend of problematic slowdown.
Growth is there for the taking. Not only in toys, puzzles and games but in other categories too, double digit growth that is even more valuable with gross profit % at 50% and more.
While it is challenging reading the news of retail businesses in trouble, for plenty in our channel there is good news if you are forward leaning and flexible in embracing new opportunities.
Here is a video of a Zoom meeting about smart discount voucher loyalty use I did a few days ago with a small group of people with the goal of creating the video to share to others. There are tips here newsagents can use:
Lotterywest yesterday announced details of changes to the Saturday game to come into effect from October this year.
Bigger Division 1 prize
The Division 1 prize will increase from an estimated $4 million to an estimated $5 million.Change to Division 6 winning combination and improved odds
The Division 6 Winning Number combination will change to 3 Winning Numbers (from 1 or 2 Winning Numbers and 2 Supplementary Numbers), which improves the odds of winning a Division 6 prize.More overall winners
The odds of winning any Saturday Lotto prize have improved, meaning more winners in every draw.Price increase
To support the increased Division 1 prize and more overall winners, the subscription price for Saturday Lotto will increase from 65 cents to 75 cents per game (plus retailer commission).There is no change to the game matrix (drawing 6 Winning Numbers and 2 Supplementary Numbers from a barrel of 45) so players won’t need to update their Favourite Numbers.
Lottery retailers I have spoken with are happy with the changes, most felt changes were overdue given changes to other games.
With the gambling space more competitive than ever, continued evolution of these more traditional games is important to their future.
EOFY is simple.
The broader opportunity is in the business: leverage EOFY interest and run a stock take sale to clear out dead stock – until mid July.
Major shopping centres in Victoria have seen a collapse in foot traffic this week as result of the surge in Covid infections. Even centres in areas outside the regions hit with infections have seen traffic numbers fall.
Talking to different retailers, sales revenue Monday through Thursday this week is down between 33% and 75% comparing with recent data for the same days.
Some retailers who felt they were climbing out of a Covid pit have found themselves at the bottom of the Covid pit, again. Rosters are being reassessed along with trading hours.
The actions of Victorian shoppers are showing a weakness in large shopping malls in that high street businesses seem to be unaffected by in the spike in Covid infections. We saw this earlier in the pandemic and to see it again now reinforces the feeling that the value of shopping centres has diminished, maybe for the longer term.
I see challenges for newsagents in the decision by Ovato to use News Corp to ship magazines as News Corp. does not have an ideal track record for on time and retailer retailer friendly delivery.
Also, there are reports elsewhere of a move to contract drivers. Some see this as a move away from respecting the award for fair pay and moving to a business to business model that results in under aware payment for the same service.
I get that Ovato has to cut costs. I suspect there will be consequences for newsagents.
Aussie media outlets are reporting that the future of cash is challenged in Australia following the surge in cashless transactions. These stories were strong early in this corona world and then they landed away. This week, the cashless stories have bounced back with several media outlets reporting on this. Here are some of the stories:
Small business retailers talk of mixed messages about cashless. Many talk of customers who are happy with cashless, prefer cashless but who demand cash when people paid a lottery prize. In several cases told to me this week, the same customers who preferred to pay using a card were angry when told that a business didn’t have the hundreds of dollars for lottery prizes because they had not gone to the bank to get more cash.
The challenge is that cash in provided lottery retailers with a cash float for prize payouts. Today, plenty of lottery retailers are having to go to the bank to withdraw cash to cover small prizes. This situation is worse when a lottery game jackpots and the prize passes $20M. The higher the prize the higher the draw on cash for small prize payouts.
Tabcorp is being no help here. The company appears disinterested in supporting small business retailers with a refund to card option being available where a business does not have the cash.
With bank branches closing in plenty of smaller regional towns, the cost of having cash for lottery payouts in this world were is used less is problematic for some lottery retailers.
The disconnect between some businesses and among some considers about cashless makes it a topic worthy of deeper analysis. I think too many news reports on this topic so far this year have been shallow. A deeper dive is needed and along the way companies like Tabcorp need to engage as they have not, so far on this, been small business retailer friendly.
If you have Australian Traveller magazine, get it next to newspapers or on the front counter. This issue will sell out for sure following excellent media coverage on launch today. It is timely and Aussie.
Here is the press release from the publisher:
Australia’s best-selling travel magazine,
Australian Traveller, has partnered with
Tourism Australia to publish a special collector’s edition
for 2020 – “100 Ways to Holiday Here This Year”.After the stress of bushfires and the shutdown from the COVID-19 crisis, Australians now, finally, have the opportunity to plan a much-needed holiday in Australia.
To provide inspiration and make planning as easy as possible, Australian Traveller gave its editors the challenge to find the greatest ‘ways’ Aussies can reconnect with their own country and support the domestic tourism industry at the same time.
To ensure there are ideas for every type of traveller, the magazine offers in-depth editorial in 10 key experience categories:
Coast
Cities
Islands
Outback
Icons
Indigenous
Regional
Food and Wine
Family
Road Trips
Some of the ‘Ways to Holiday Here This Year’ include:Outback Glamping experiences around the country.
Island Paradises of Australia
Wild Experiences across Australia with Dwarf Minke Whales (Cairns), Koalas (Port Stephens), Manta Rays (Lady Elliot Island), Sea Lions (Kangaroo Island), Whale Sharks (Ningaloo)
Secret Beaches in NSW, QLD, TAS, SA and WA
Station Stays in NSW, QLD and SA
How to ‘Rock On’ – not only Uluru, but Remarkable Rocks, Murphy’s Haystacks, Sawn Rocks and the Pinnacles to name a few
The special Outback Gorges in the NT, WA and QLD
Australia’s newest Iconic Rail Journey from QLD to SA
Great Cellar Door Experiences across Australia’s wine regionsPLUS many more…
“Our mission is to connect Australians to their next amazing Aussie trip,” said Australian Traveller editorial director Leigh-Ann Pow. “To make sure they have no excuse, we have found the greatest experiences and ‘ways’ for every Australian no matter their interest or style of travel.”
“For those of you dreaming or planning to get out and explore more of this great country, Australian Traveller’s Holiday Here This Year issue, produced in partnership with Tourism Australia, is the perfect travel companion,” said Tourism Australia managing director Phillipa Harrison.
“This incredible country is so vast and varied, full of unique experiences and hidden gems just waiting to be explored, that I don’t envy the team tasked with the challenge of narrowing it down to just 100 ways people can enjoy an Australian holiday.”
To make sure the magazine is accessible to as many people as possible, Australian Traveller Media reduced the cover price to cost just $3.95 from newsagents and select Coles supermarkets. The edition also includes a free wall map of the 100 ‘ways’.
The website www.australiantraveller.com/100-ways-to-holiday-here-this-year will be launched 12:00am Thursday 25th June.
Bauer Media exits Australia, selling its magazine titles to private equity firm Mercury Capital for a $500 million loss. #MediaWatch pic.twitter.com/Ul8LqwZYTn
— Media Watch (@ABCmediawatch) June 24, 2020
Choice yesterday released a report indicating that several significant retailers hiked prices during the Covid lockdown.
Between 18 and 19 March 2020, for instance, just as the national lockdown was about to come into effect, the price for a 237L vertical freezer from Winning Appliances went from $2085 to $2850, and it stayed at the higher price until early April.
It was a 37% price increase overnight. Over the six-month period we analysed, the biggest previous price jump for this freezer from Winning Appliances was 10%.
Why does this matter here? Small business retailers can share the Choice story to underscore a different between big business and small business.
I’m hosting a Zoom meeting today to discuss how discount vouchers can help you bring shoppers back sooner and how single visit shoppers can be encouraged to spend more. I started using these in February 2013. They are the most effective lo9yalty tool, far better than points. Here is the notice re the meeting:
Lunchtime training: Discount Vouches.
Join us Wednesday @ 1pm for a free Zoom meeting in which we will explore thebusiness case for using discount vouchers as a competitive focussed and differentiating loyalty offer. While we offer loyalty points tools in our POS software it is discount vouchers that have a better track record for businesses serving one time only shoppers, infrequent shoppers as well as shoppers in highly competitive situations. Wednesday @ 1pm. Join us as we unpack how discount vouchers work, how to set them up and how too pitch across the counter:
https://zoom.us/j/98793306169?pwd=ZDF0QkdVbkdUajk0eHlDK3IwNWVOZz09
Meeting ID: 987 9330 6169 Password: 286811
Wednesday, June 24, 2020 @ 1pm.
It has been a busy four months at my newsagency software company, Tower Systems, as the software developers have worked with Epay to deliver a POS software integration with the Epay phone recharge and voucher vending platform.
I met with the folks at Epay in Sydney on March 9 to discuss the opportunity of providing newsagents with a viable alternative to the Afterpay Touch platform which had announced weeks earlier a staged withdrawal from business. What followed the March meeting was more meetings, settling of integration standards and discussions on products that could be brought to the integrated platform.
Through this, too, we worked with Afterpay Touch management to see if there was an alternative from their side as we did not want that door closed without at least trying.
With more than 1,700 newsagents as customers, Tower had much at stake in terms of customer service. It had to maintain the Touch platform while developing the Epay integration and doing this latter work to exacting standards set by Epay headquarters in Europe.
The Touch withdrawal decision and the need to integrate with Epay happened at the same time as Tower was in the final weeks of beta testing a major update to its software technology, database platform and look and feel. That project was four man years in and the release schedule had been set. So, there was much to consider and co-ordinate.
Through April and May the newsagency software integration with Epay was completed, tested and thoroughly. Then, it was handed to Epay for their testing. This was comprehensive and required work in Australia and Europe.
With the Tower Systems Epay integration approved the next step was to load the product data file from Epay. This was finalised yesterday for all newsagency software companies. That product file had to itself be tested. Hence, the announcement from Tower Systems to newsagents today about availability of the Epay integrated newsagency software.
Now the next and most important phase of work begins as the Tower support team helps 1,700+ newsagents make the move. With Afterpay Touch closing June 30 there is much to do. Time is of the essence.
Throughout this project, from March to now, Tower has been sending daily emails to its customers. These have included regularly updated information about the Epay integration. The company has also sent three print newsletters, to reach newsagents who don’t connect with emails. The company has also used its social media platforms and support calls to reach as many newsagents as possible.
The work by Tower to date has cost close to $100,000. Tower Systems is delivering access to Epay at no cost to newsagents.
Note: I own the Tower Systems software company.