Australian Newsagency Blog

I have heard from some newsagents of magazine deliveries set for today from Ovato not being delivered. As things go with Ovato, newsagents are left without stock and the likelihood of lost stock not being replaced.

While not getting the stock is frustrating in itself, there is a cost to newsagents who rostered additional staff to handle magazines when on a Wednesday they would not usually have them rostered on. So, lost revenue and additional labour costs.

Ovato is having a bad April.

On the newsXpress website, any customer of any newsXpress store can provide feedback on their shopping experience. often, feedback does not relate to a newsXpress store. Here is one such example. The person leaving the feedback contacted us the next day apologising and indicating it was for another newsagency not connected with newsXpress.

I share it here as it reflects the value of making providing feedback easy and the interest shoppers have in sharing their feedback.

My 17yr old son ventured into your newsagency enquiring as to whether the store had a key ring. Tues 16th April 1:50pm The lady (Older lady with blonde hair or partially blonde) advised my son the store didn’t have any then added “I don’t know what your fuckin talking about “. My son apologised and thanked her before leaving as he felt embarrassed. This behaviour and conduct is inappropriate and uncalled for particularly when speaking to a young person who was polite. Perhaps you need to address the conduct of your staff and the unnecesssry use of foul language. Poor customer service in any case .

Whether we like it or not, we are all judged by the experience in any store in our channel, especially businesses with lotteries as this is the most unifying product category in the channel, setting shopper expectations.

Making providing feedback easy helps us be more in touch with shopper experiences, even those not in our own stores.

Coles, on Swan Street Richmond, has a solid approach to Mother’s Day. I saw three floor units: next to stationery, at the checkout and at store exit. Appropriately apart from each other. Multiple locations makes sense if they want to capture the impulse purchase. We can learn from what they are doing.

A couple of newsagents have emailed me about customer comment regarding Easter bumper editions.

One said they had a long-term home delivery customer saying it is time for them to switch to digital and that this surprised them and got them thinking about the future of print.

Another contacted me to share frustration of customer complaints about the in-store product without access to support forms the publisher to handball the complaints.

This copy of AFR Weekend has been on sale since April 18. Five days.

Regulars here would know, for years I have seen no upside in print newspapers. While I sell then and engage with the requisite in-store promotions, I see tho upside in terms of traffic of margin dollars contribution. Not having home delivery for more than ten years now has saved me from questions abut things like bumper editions.

The paper medium is inefficient for news and analysis. It is expensive to produce and distribute, with many distribution newsagents making a value contribution beyond what is reasonable.

The only reason many print editions exist today is to provide a time related pathway for publishing companies. There is no upside for newsagents. In the meantime, newsagents deal with questions like some have had over Easter.

Okay, I get that for many, newspapers provide terrific foot traffic. The thing is, engaged newsagents should be well advanced in alternative sources of traffic, sources with upside rather than the certain downside of print.

With so many away on school holidays, this long long weekend is a good opportunity for some fun in the shop. It is an opportunity to play away from what has been traditional for the business.

I was talking about this with a newsagent a few days ago, about the opportunity to try something really crazy that they thought they could never do in their shop. I think these couple of days are the perfect opportunity to play, to experiment.

Now, more than ever, there are no rules about what we can and can’t do in our businesses, or at least the parts of the businesses retailers control.

It could be a new shop floor layout, a new in-store service, a different traffic-attracting acting or more. whatever it is, these days are ideal for play.

My point about this weekend is – if you are open and the town is quiet, do something crazy for you and your business, to find what might be next in terms of the embrace of change.

The Guardian has a report today about The Daily Telegraph from News Corp. being delivered free to homes in Warringah.

The most mysterious event in the Sydney seat, where the former prime minister Tony Abbott is fighting a challenge from the independent Zali Steggall, is the arrival of unsolicited copies of the Telegraph, which began in late March.

Residents in Manly, Queenscliff, Curl Curl and Fairlight said they had begun intermittently receiving copies of the News Corp tabloid newspaper, despite not being subscribers. The Telegraph has run a number of stories that would not have delighted Steggall’s campaign.

News Corp. responded:

A spokeswoman for News Corp said a small number of homes had been involved in recent sampling activity in the Manly area, which had now ceased.

“Sampling activity is a standard marketing practice to introduce products to potential new customers,” she said. “All of our sampling activity is based on our market research.”

Ovato (Gotch) has sent this email to some newsagents today:

Dear Retailer,

Due to a corrupted file a number of EDI returns were unable to be processed by us. We have identified the agents with missing returns and we are emailing you as we need you to re-send your EDI returns from 4th or 5th April through xchangeit as soon as possible so we can process your returns.

You can resend your returns from your POS or by choosing to resend the file through the Xchangeit website.

https://xchangeit.lpages.co/xit-main/#info-for-newsagents/
Log on using your account number and password
Choose the file and click on resend.

Regards
National Contact Centre
Retail Distribution

I’m told 400 newsagents have been affected. Ovato sent the email without advising software companies. Why does this matter? The software companies are the first line of contact. had they been forewarned they could have been proactive with advice rather than taking calls and scrambling to understand what has actually happened.

This is an own goal by Ovato, with companies like my own Tower Systems left to fund the cost of helping newsagents.

If Ovato did not inform XchangeIT then the failure is even greater.

Asking the files to be resent is problematic operationally. It can be done. However, getting 400 newsagents to do this is the issue, especially this week before Easter.

Given how Ovato handles returns claims disputes this could cause a significant waste of time and money for newsagents.

UPDATE 18/4/19 5:59AM:

The help desk traffic from this is immense already. While it is easy to resend the file, many have never done it and, naturally, they call for support to make sure they are not making a mistake.

What a failure by Ovato. Not the original problem and that can happen. No, the issue here is the poor communication by people at Ovato. They decided to not advise the software companies or XchangeIT before advising newsagents. That decision added workload to everyone and added unnecessary stress for newsagents.

UPDATE: 18/4/19 8:41am. Tower Systems now has the list of affected newsagents and is therefore better equipped to provide advice. That we had to chase this and did not get it until now is appalling.

Every year it is the same … licenced products perform well. Even movies that perform to average numbers at the bios office support products that sell well in retail. Then, there are the stand out licences, on which we can bank results, like Harry Potter.

Detective Pikachu looks good. The early indications are good due to the multi-faceted engagement with the licence – game, movie and the Switch.

We use licenced products in my stores to attract shoppers who would not usually think about us for plush and game related products. The licenced products usually lead to other purchases as we stock up what we can to play deep into a licence. This is where having supplier relationships beyond the traditional helps.

I especially like it when I can drive purchases from traditional categories, like cards, from a licence play. Unfortunately, too often, there is a lag for licences from that category.

To newsagents not playing in the licence space, I suggest you look at it. The new traffic opportunities are worth it.

The New Daily has the story: theft is estimated to cost Australian retailers $4.5 billion a year.

Self service has not been quite the gain the big retailers expected. Wow.

Retail is about customer service. Good customer service is a human-based function.

When I first saw the Zoodle retail format by UK newsagent chain WH Smith in 2012 it was primarily a kid-focussed store, at Melb0urne International Airport. A week ago, I saw a new incarnation of Zoodle, at the Virgin terminal in the Brisbane domestic airport.

This latest version of Zoodle I got to see is quite different to what I had seen before. It is primarily airport convenience in focus, but with a presence of items for kids as well as some games. It certainly looks different to the usual airport convenience or news related retail, but on its shelves it offers the same products – candy, travel items, phone SIMs chilled drinks as well as coffee. Kids are represented, but not significantly.

I like the layout, it is open and easy to shop. However, it remains traditional retail in approach. I didn’t see them embracing of the advances I have seen in US convention hence and airport retail businesses.

The Brisbane airport store does not look like it fits neatly with the pitch on the WH Smith website:

Zoodle will send you on your travels with a smile. We have a great selection of children’s books, toys, gifts and games to keep young travellers happy, plus gadgets, snacks and treats for all. Whether you’re looking to keep the kids entertained on the flight, or looking for the perfect gift, we’ve got everything for the young and the young at heart.

I wonder if what we are seeing is an evolution of Zoodle, ahead of what is on the corporate website.

I also wonder if we will see it emerge outside of transit locations. On the hah street, this would be a fresh look – in my view, more interesting than the tired 7-Eleven.

The next four days offer excellent opportunity for impulse purchase at the counter. My advice is to leverage this with easy to purchase product opportunities placed at the counter while at the same time reducing visual noise from other products at the counter that are not as relevant in the next four days.

What do I mean?

1. Take everything off your counter from the customer side.
2. Rebuild the office with a small number of easter -themed products.
3. Have at least one offer to which your staff refer, every transaction.
4. Include in the product offer one or tow cards.

I know of plenty of newsagents who are experiencing growth from Easter. This is most likely to ha[en if your actively engage.

Do what you usually do and you will get your usual result.

One thing is for certain during election campaigns, people are more likely to share their opinions across the counter. This is especially true of newspaper shoppers making their purchase and commenting on election related stores they notice on the front page.

While most comments are harmless, there are some delivered with venom, hate even, that require effort to listen to without commenting back.

One way to diffuse the situation could be to have a politics free zone established and extract a ‘fine’ for people who do comment. Have two or three charity tins for people to donate a coin as a ‘fine’ for them commenting. the charities you collect for could be those of prominent local candidates – the donations are a way of voting.

This graph shows movement in the share price of Ovato for the last six months – a decline of 57.8%. On the face of it, the trend is not good news.

The Herald Sun, today…

betterRetailing, a UK news source and indie small business retailers, has covered six key takeaways I tapped into from participating Shoptalk this year.

Of all the takeaways, the one I find my self thinking about the most in the context of the Australian newsagency channel is this one:

4. Don’t let history define you
UK and Australian newsagents have a shared heritage in historically being a key part of newspaper distribution. We have all suffered from declining circulation across the formerly successful categories. To be successful in the future, we need to find a new personality that will renew or refresh our customer base. The CTN model has already faded, and convenience is changing with food to go. The opportunity that your space and your people offer are the most valuable asset you have for future success, not what you used to sell.

I am drawn tonic because I see it happen many times, people making decisions about their businesses because of history that they have either experienced or heard about.

History is interesting but it is not ur future. Our future could be a 90 degree turn away from our past or more even. That is what is so exciting about the newsagency channel today – the path for each of us in the channel is ours to set. Now more than ever we have a future that is set by us.

XchangeIT reps say they have been asked to connect lottery terminals with newsagency POS software. They are talking with POS software company its about feeding transaction data from lottery terminals to POS software.

As I understand it, XchangeIT will receive transaction data that you select on your POS terminal to add to a sale. If you have multiple lottery terminals the feed will all be to one XchangeIT location and you’ll need to select the right transaction.

Here’s my question for those who capture lottery product sales in their newsagency POS software: are you likely to use something like this or will you stick with scanning tickets?

I am asking the question here since I don’t currently have lotteries in my newsagencies. My feeling is that the XchangeIT planned approach is clunky and that it brings another party to lottery transactions that does not add value.

Opportunities for new shopper traffic, higher GP% and greater per visit value.

I invite you to a new free business management workshop for newsagents where I will share an insight into trends in current trading data, trends for core categories overseas and opportunities for growth as we all recast our businesses.

I will ask some tough questions and through these navigate to challenges that sit at the root of some newsagency channel core categories and work through, with you, several opportunities growth in these.

What we explore together will be relevant to any newsagent in any situation, large or small, city or country. The sole focus will be on creating a brighter future, even if that means for you your own business exit strategy.

You will receive valuable takeaways you will be able to use right away as well as thought-provoking questions each of us in retail will have to answer.

While some examples will be newsXpress related, this is not a newsXpress sales event. It is a continuation of my Newsagency of the Future Workshops, which I first ran in 2004 and have evolved ever since.

I will also share newsXpress case studies where business owners have recast their businesses through change. These will include city and country businesses. Large and small.

Please, join me as we invest in a stronger newsagency channel.

1. May 6. 9am Melbourne. Book now.
2. May 7. 10am Sydney. Book now.
3. May 8. 10am Brisbane. Book now.
4. May 9. 10am Hobart. Book now.
5. May 10. 10am Adelaide. Book now.

These are the only dates, because of commitments for the next few months.

The issue of button batteries and the risks the present is important for any retailer selling products that use these. Product Safety Australia, part of the ACCC, is active on the issue of button batteries right now.

Every week, around 20 Australian children present to an emergency department following exposure to button batteries, including ingestions and insertions. Keep products with button batteries out of sight and out of reach of small children.

You only have to look at the recalls this year to understand how current and serious this issue is:

1. Royal Automobile Association of South Australia (RAA) — Promotional Silicone LED bicycle light distributed as part of the RAA Street Smart Program
2. Officeworks – Teknikio1, Teknikio2, Teknikio3, Teknikio4 – Electronic Circuit Sewing and Activity Kits
3. Daiso Industries (Australia) Pty Ltd — Various Candles, Lights, Calculator and Stopwatch Products containing Button Batteries
4. Cricket Australia — Promotional LED Wristband
5. St John Ambulance Australia — Tiny Tots First Aid Kit

There are plenty of news stories about the issue, like this one from the weekend about a child who ended up in hospital.

What can retailers do? This advice from the ACCC to consumers could guid our inventory ranging decisions:

If buying a household device or novelty, look for products that do not run on button batteries. If you do buy button battery operated products look for ones where the battery compartment requires a tool or dual simultaneous movement to open. This will make it difficult for a young child to access the battery.

More and more retailers are sharing images and videos of people they say have stolen from them thanks to free access to social media platforms.

It seems to me that the biggest risk of such action is the possibility that publishing such material could be defamatory. All Australian states and territories passed the Defamation Act 2005, which stipulates under section 439:

(1) A person must not publish matter defamatory of another living person (the “victim”)— (a) knowing the matter to be false; and (b) with intent to cause serious harm to the victim or any other person or being reckless as to whether such harm is caused.

Are retailers able to reasonably determine truth as well as harm that could be caused.

I hear the argument – the video does not lie. However, in a court, with robust defence, theft may not be determined.

While we retailers want swift justice in the event of shoplifting, I am not sure that publishing a video or image on social media is justice.

No, I am not saying don’t publish videos and images on social media. Rather, I am saying take care, make an informed decision. Be sure of your facts. Make sure that the action you choose to take is worth it.

I’d note that in the US, the 7-Eleven approach is to build the cost of shoplifting into their product pricing model.

Here are some more resources on this for you:

1. Life Hacker.
2. Adelaide Now.
3. American Express.

I took some photos of guy cards at one of my shops yesterday and used them to put this video together for newsXpress members to use on social media. It is deliberately simple, short and narrow if focus. By narrow, I mean I deliberately selected cards offering humour – I’ll do a different video on expressing other emotions.

The video is a small part of a broader strategy around male card giving. I want to help newsagents sell more and be seen by more people as the destination for cards, especially male cards.

In our card departments it can be chaljenginnto find a car because of a sea of colour. The video calls out some cards people could / should identify with.

For those wondering why the whole card is not shown, that is a design choice.

newsXpress releases between four and six new videos each week for use on social media. They cover cards, stationery, gifts, jigsaws, games and more. They, along with a library of social media images and other collateral are available for newsXpress member use anywhere.

I had an opportunity to see the card range in a Reject Shop earlier this week. As the photo shows, it is considerable. (Click on it for a better look.) yesterday, I checked another of their outlets. It was an equally impressive in range. While the Reject Shop attracts a specific shopper, their range position in this category is instructive as to range newsagents should consider for their businesses.

If you have not been in a Reject Shop recently, go – there is much they are getting right for the shoppers they pursue, as their strong card range shows.

I think caption range is important in maximising the card opportunity as is depth of style within caption range.

In the Aussie newsagency community there are many media watchers. For them, I commend this New York Times article: HOW RUPERT MURDOCH’S EMPIRE OF INFLUENCE REMADE THE WORLD as today’s recommended reading.

Be sure to read this too, from Michael West: Rupert Murdoch’s US empire siphons $4.5b from Australian business virtually tax-free.

There is also this from The Intercept. on Lachlan Murdoch, philosophy and white nationalism.

An Australian publisher asked me this question yesterday. In the discussion I said I would pose it here, without identifying them.

They asked because they are concerned at the continuing fall in engagement from newsagents supporting their titles. For context, most titles have cover prices today that they had four and more years ago.

I said margin dollars was the issue – this is made up of a low GP% of 25% and a static cover price, and falling sales, which combine to make the titles less financially rewarding today than four or five years ago but requiring the same labour, space, shrinkage risk and cash flow investment as four or five years ago.

Magazine publishers increasing cover prices in line with CPI at least and offering a respectful GP% of at least 35% would, in my view, encourage greater engagement.

What do you think…

What would it take for newsagents to engage with magazines again?

I am tired of people from local charities and community groups only stepping into or calling or emailing the business to ask for product or cash donations.

Local charities and community groups need to learn that support from local businesses is only possible if local shoppers, including members of their group, support local businesses.

While we have a structured and consistent process for handling the many charity requests we receive, it is interesting to note how many competitors from people who never shop with you – it is plenty. It’s another reason for the structured process we have being good.

There was one situation I heard about recently where someone visited a newsagent to ask for a product donation from a specific niche category. When the staff member was getting the owner, another staff member chatted to the person who mentioned in passing that they buy their stock of the particular product online because it is so much cheaper. Checking online later, it was 5% cheaper if bought several times the quantity one would usually purchase at a time.

People from local charities needs to support local retailers if they want support from them. 

The announcement yesterday by Woolworths that it would close 30 of their Big W stores and close two distribution centres over three years understandably played as big news. The closures represent 16% of the Big W rooftops.

Following the conclusion of the BIG W network review, Woolworths Group has identified approximately 30 BIG W stores for closure over the next three years and two distribution centres (DCs) that will close at the end of their leases. The cost of exiting these sites will result in a P&L charge of approximately $270 million mainly related to lease and other store exit costs.

Given the closures in our channel, the planned Big W closures over three years are lower than we have been seeing.

Looking at this news more broadly, I have comments in a number of areas:

POSSIBLE IMPACT FOR NEWSAGENTS.

Newsagents with a business in a centre with a Big W that is closing could be in for some disruption, depending on what the landlord does with the freed space. This would be especially true in centres that were build around the major tenant.

If I was in a centre with Big W as the anchor tenant today I’d be asking questions as well as redoubling efforts for stand-alone traffic generation.

ONLINE.

The Woolworths announcement points to online playing some role in the decision. I think there is truth in this. Department stores, including discount variety stores like Big W, are struggling with online as their shoppers focus primarily on price. Shoppers buying on price are not loyal. Loyalty is driven by service, value-add and exclusivity of product.

Australian department stores and discount variety stores are yet to reasonably face the challenge of online.

CONSUMER CONFIDENCE.

I think the announcement yesterday will impact consumer confidence as it gets people thinking about the impact of losing work and it gets other retailers thinking about their own situation.

BEING UNIQUE.

The Big W announcement is a reminder to every retailer large and small that you need to have a unique proposition. Your pitch needs to be competing, enticing and positively memorable. Achieving this insures your business against competition. however, it is hard work, relentless work. Plus, being unique is easier said than done.

WHAT TO DO TODAY.

In our shops today we should be happy, positive and engaged. We need to provide these experiences to shoppers, playing against expectations and ensuring we are not feeding into any negative thought about the Big W news.