Australian Newsagency Blog

Okay so OzLotto did not go off and next week’s jackpot is now $80,000,000. This offers a nice traffic boost that lottery retailers can leverage. It’s an opportunity to seize.

From the front door, within the rules of what is allowed, pitch what differentiates your business, what can be easily understood and what could bring them back.

Some sales representatives who call on newsagents and other indie retailers will do anything to get you to buy their products or service.

Retailers would know who I mean – they are the sales people who try and win business by lying about the competitors.  It’s their point of difference.

I am talking here about outright lies and not just tough competitive positioning.  It speaks volumes for their belief in their own product that they focus on the competitors more than themselves. Thankfully, business won this way often bites them sometime down the track.

If a supplier representative says anything to you about a competitor of theirs, ask them to prove it.  This will soon shut them up.  Better still, go to the company or person they are speaking about and let them know – it is what you would want if it was you they were talking about after all. Or even better still, write down their claims in front of them, with date and time and their name. Make it clear you will hold them to what they have said.

It is essential you have evidence down the track should you need to confront them or their boss about claims made.

At Michael West’s excellent indie news and analysis site is this terrific report about the growth in engagement with independent media:

Independent public interest journalism continues to attract larger audiences. Growth in online readership at www.michaelwest.com.au jumped 67 per cent in the last quarter. Kim Wingerei at theIndependents.org.au reports.

AUDIENCE GROWTH at michaelwest.com.au is part of the broader trend — the latest report for independent digital media shows overall growth of 21.7 per cent in the 27 sites in the index, while the “big four” – Sydney Morning Herald, The Age, The Australian and News.com.au – continue to decline in print and battle to get enough subscribers behind their paywalls to fund their newsrooms.

In the week when Crikey announced much welcome additions to its journalism ranks, it is great to be able to report the continued growth of online independent media(1) in Australia. In the third quarterly report, the 27 online sites(2) tracked grew their web traffic numbers by 21.74 per cent from February to May 2019. With the previous period growth of 10 per cent, that is a whopping 33.9 per cent compound growth over the last six months.

Crikey is another one of the outstanding performers on the list with 49 per cent monthly growth in visits – to 446,000 in May (despite having a paywall) according to SimilarWeb – an online audience measurement service. Crikey will need that kind of growth to help support the addition of a dozen journalists in their new INQ unit (”Inquiry Journalism”), but they seem to have found the right balance with their subscription model and funding from high net worthers Cameron O’Reilly and John Fairfax.

This is not only happening in Australia. Around there world there is growth in subscriber and reader engagement with independent media. This is a healthy trend in terms of news access. It is an interesting trend for retailers of news products, like newsagents.

I subscribe to four independent news outlets in Australia. I appreciate their independence. What these sites are doing for news is similar to what our businesses can do for retail. We are independent, competing with big business.

Read more of the above article here.

Typo has a range of journals that look like National Geographic magazines, as part of their front of store stationery pitch. I have see it in three of their stores in the last two weeks.

They have gone for iconic covers that resonate. It’s a smart move by this forward leaning retailer. It would work well in our channel.

While we continue to pitch functional stationery, stores like Typo are growing sales through fashion related moves that encourage purchase beyond need.

This is the future of stationery growth. As paper is used less, we need to expand the reasons for people to purchase stationery products, if we want to remain in the category. No, a cute looking journal will not cut it.

I love this pitch in a Wellington, New Zealand, lottery outlet of cards next to the lottery terminal. It guides shoppers about a lottery ticket (or product) as being ideal for slipping into a card, subtly encouraging the shopper without in-your-face marketing. It’s show, don’t tell.

I suspect that the placement of greeting cards next to the lottery counter helps in some way drive lottery product purchase – and not distract from general lottery product purchase.

It would be interesting to see this tested in a structured way in Australian lottery outlets, to see if the placement benefits card and lottery product sales. Such tests could be run in association with the lottery companies given the mutually beneficial outcome being sought.

Gerry Harvey has called for consideration of this.

“In a lot of our stores overseas, where we’ve got the security people, they’ve got guns on them.

“Now if those kids knew there was a security guard there with a gun on him, they would not have gone in.”

In my experience employee theft is a higher cost to retail businesses than shopper theft. But my data is from indie small businesses. Maybe in Gerry’s stores, people do walk out with washing machines and fridges.

I think the last thing we need is armed guards in retail. But, hey, Gerry loves a headline and he sure got that this week with this pitch of his.

I’d like to see evidence on what is being stolen by store type. This could inform a more educated and less shrill discussion.

If you are bashed in Victoria and have not seen the new Officeworks near Southbound, check it out. It is impressive. The range, hours and price pitch are impossible for indie retailers to match.

The launch tomorrow of It’s Your Day by Bauer Media is important for newsagents as this new title targets a demographic that is key to our channel – women 35+. This is the demo that spends the most on cards, visits most often and connects best with the newsagency channel.

The launch of It’s Your Day by Bauer provides us with an opportunity to re-up our pitch to this high-value newsagency shopper, to deepen the connection and leverage the launch activity.

The marketing around the new title launch offers us an opportunity to pitch our local businesses and to do this in a way that separates us from supermarkets and others. For them, this title will be another SKU whereas for us it feels at home with our core customer.

Engaged card companies will be especially happy about this new title. I hope they take the time too understand that target reader for It’s Your Day is the target shopper top off mind for the card companies, and their retailers.

We don’t see many magazine launches from major publishers. This launch is important, a valuable investment in print. In some respects, how it goes in our channel is up to us.

NEW WEBSITE 🙌 🙌 🙌 Today NewsLocal launches the Canberra Star, a hyperlocal digital news platform providing community news for the nation’s capital.

MORE HERE: https://t.co/dGnyoKT4rE pic.twitter.com/j0Zquj9NCh

— Canberra Star (@thecanberrastar) June 10, 2019

Three price change notifications to one newsagent, for three newspapers, all to the same cover price, but each with a different commission, from the one publisher. The work for the newsagent is the same for each. Maybe I am missing something, but the differences do not make sense to me.

Okay’s it’s not a magazine, but a book. However, this photo that came up on my Twitter feed today made me laugh about price sticker placement.

More and more newsagents are deciding to close on public holidays given the high labour cost (or high family time cost), declining newspaper margin in real terms, often mediocre foot traffic, less destination traffic for magazines and active competition from others for core traffic categories in the daily or several times a week purchase category.

At least once a week a newsagent sends me sales data by day of week and time of day for a discussion about these and similar topics.

While my preferred option is to look for opportunities to make situations work trough recasting the appeal of the business, sometimes, a small retreat is what is needed.

I think this is why plenty of newsagents will be closed today, Queen’s Birthday (in most states).

Find a wall in your shop and turn it into a mini gallery space for local artists. Make it available at no cost.

Choose artists based on their social media following and the shoppers they could attract to your business. Check their Facebook and Instagram followings. Look at numbers as well as how they engage. This is important that new new traffic is key in business today.

The benefit for them is that you help them find new customers too. The relationship has to be mutually beneficial.

The photo is from a shop I have visited. On the wall they had a small showing of photos taken by a local young photographer. There was nothing commercial about it.

To me, this idea is a not brainer for any regional, rural or high street independent retail business. The more we support our local community the more likely the local community will support us.

The added benefit is the beauty you can bring to the shop.

Be a force for good: support local artists and give locals another reason to visit your business.

A couple of weeks ago I did a half-hour podcast with Bob Phibbs, The Retail Doctor. Bob is legendary in the US for his retail knowledge and advice. I appreciate the opportunity for the convessation and to share some news from ur channel in Australia. Click here if you’d like to listen.

Following the decision announced by ACMA yesterday, Lottoland has commenced proceedings against the federal government. This quote from Lottoland from the SMH story plays until current debate about freedom of expression and beliefs:

“We are fighting for freedom of choice.”

Talk about tugging at heartstrings. I hope people see this argument for what it is … nonsense. I think Lottoland is fighting to sell its gambling products. Punters are their customers, not a movement of people who feel aggrieved about their rights.

Here is a more complete statement from Lottoland at iGamingBusiness.com:

Lottoland is disputing the ACMA’s decision, and has launched legal proceedings.

“We have decided to challenge ACMA in the Supreme Court because we believe their view on jackpot betting is wrong,” Lottoland Australia chief executive Luke Brill said in a statement issued to iGamingBusiness.com.

“Lottoland’s jackpot betting products have been approved by the relevant licensing authorities, and we believe they are fully compliant with Australian law.

“We have worked hard to adapt to recent changes to the law, and we are committed to providing exciting new products that our customers love,” he explained. “By taking this stand against ACMA, we are fighting for the rights of hundreds of thousands of Australians who enjoy the occasional flutter. We are fighting for freedom of choice.”

It will be interesting to see how this plays out. I suspect the issue has a long way to go yet given the stakes and the apparent resources  of the international Lottoland business.

Remember, Lottoland launched in Australia mocking newsagents, denigrating our channel, those who worked in it and even some who shopped with us.

AMCA, The Australian Communications and Media Authority, released this today:

ACMA finds Lottoland in breach of the Interactive Gambling Act

An Australian Communications and Media Authority (ACMA) investigation has found that Lottoland Australia Pty Ltd has breached the Interactive Gambling Act 2001 (the Act) by providing prohibited interactive gambling services.

The ACMA investigation found that several Lottoland online jackpot betting services were games of chance which are prohibited under the Act.

These included the Mon & Wed Jackpot, Tue Jackpot, Thu Jackpot, US Millions, and US Power jackpot betting services.

Lottoland disputes the ACMA’s findings and has commenced legal proceedings.

Lottoland’s service, Daily Millions, was not found to breach the Act.

The ACMA will not be making further comment while legal proceedings are on foot.

I am grateful to Ash Long from the Melbourne Observer, and friend of newsagents, for sharing this.

FairWork is targeting several business channels to inspect employee records and employment terms. How any business fares will depend on how the business is run. The requirements on business owners are simple:

1. Pay at least the aware rate this includes family members who are not documented shareholders in the business.
2. Pay for all hours worked, including trial hours.
3. Provide at no cost any required uniform.
4. Have a structured roster and provide this in advance.
5. Have a clear statement of duties.
6. Provide a payslip with every pay.
7. Pay on time.
8. Pay super on time.
9. Maintain work cover (or equivalent).
10. Maintain proper records of compliance of the above.
11. Maintain a policies document should you plan to rely on failure to follow a policy at some point in the future.
12. Have a process employees can follow should they have any concerns or wish to raise a dispute.

The WA Premier made an announcement today of initiatives supporting lottery retailers.

• Retailer commissions on Lotterywest sales to increase by 10.8 per cent from December

• Lotterywest to roll out package of initiatives to boost sales and create long-term retailer sustainability for small businesses

• New initiatives will ensure Lotterywest can continue to support WA community through grants program, which delivered $260 million back to the community in 2017-18

Premier Mark McGowan today announced that retailer commissions on Lotterywest sales will increase by 10.8 per cent from December this year, helping small businesses.

This will increase the total gross commission for retailers from nine per cent to 10 per cent, which is a 10.8 per cent increase overall, ensuring Lotterywest continues to pay the highest retailer commission in Australia.

The increase will form part of a package of initiatives designed to boost sales of Lotterywest products, ensuring long-term retailer sustainability and a strong return for the Western Australian community through Lotterywest grants.

Here is the email sent to Lotterywest retailers:

Dear

Today the McGowan Government announced that we are developing a package of initiatives to support retailers.

This includes an increase in gross retailer commissions from 9% to 10% for most games (excluding Cash 3, Super66 and Scratch’n’Win) which will come into effect from December 2019.

As a Lotterywest retailer, you are important to our business success and we are committed to assisting you where we can in these challenging economic times.

Over the coming months we will engage with you and other key stakeholders on the shared issue of sustainability, to work out what these initiatives will look like and seek feedback.

For more information, please read the full media statement. I have also included the Premier’s personal letter you received yesterday.

Your Retailer Relationship Officer is available to answer any questions you have. You can also contact our Customer Services team on 133 777 or contact@lotterywest.wa.gov.au.

This is a significant project for Lotterywest and we look forward to working together to build a sustainable retail network, so we can continue a strong return for the
WA community.

Kind regards

Susan Hunt PSM
CEO Lotterywest and Healthway

Questions and Answers

What is the new commission rate going to be?
The new gross commission will be 10% for all games excluding Cash 3, Super66
and Scratch’n’Win because these are inclusive of commission.

When will we find out more about the initiatives?
We will send you an information pack detailing these initiatives over the coming weeks.

Will there be a price rise and what should I tell my customers?
There will be a price rise from December 2019. Further information will be provided closer to this date, which will include what you need to tell customers and when.

News Corp earlier this week announced it’s latest commission rate for retail newsagents.

Making barely 12% of any product in retail today is nuts. While the year on year increase is 5%, it’s off a low low base and reinforces a fee that is below award rate level, below poverty line level.

An average suburban newsagency will sell, say, fifty papers Monday to Friday. That delivers $10.79 ex GST in margin. Out of that, the store has to fund labour, rent and other business costs. Selling fifty newspapers will take around twenty minutes. Twenty minutes will cost around $6.93 in labour costs. The space taken by papers will cost around $10.95.

Based on these two numbers alone, fifty newspapers sold a day provide a loss for the business. Add to this the labour cost of receiving inventory and managing returns, covering the cost of theft and dealing with other costs associated with newspapers.

This is the problem with newspapers in a retail newsagency today. The numbers do not work.

Some publisher reps say that the traffic generated is beneficial elsewhere in the business. There is no evidence in sales basket data to support this opinion.

No wonder some newsagents are quitting the category.

What would I like to see newspaper publishers do? Simple, be respectful with margin. Double it immediately as a start. This would encourage newsagent engagement. I am confident it would lift sales. This would serve publishers well.

New Bauer CEO, Brendan Hill visiting Bauer Media Group COO Veit Dengler spoke with Hannah Blackiston for Mumbrella. Here are some quotes that may interest…

“We’ve made no secret of the fact that we’re going to keep growing our audiences and we also believe the data that will come out of it that will put us in good stead for the future. The business has been transitioning for sometime and globally we’re getting very serious about these different revenue streams and different areas for the business to grow,” says Hill.

…

“I think if you look worldwide you will certainly see that some magazine publishers have disappeared or been acquired, that is a trend. But three is actually not that many players, in most big markets around the world there are more publishers than that. So I would say it’s actually already a fairly consolidated market,” says Dengler.

…

“Media is always changing, as anyone in this game can tell you, but that’s the fun. That’s why we are into it, that’s why passionate people work in our industry. There are absolutely going to be changes, do we know exactly how the business will continue? No. But many big publishing houses are doing this globally, changing plans, acquiring, launching, closing. It’s the nature of media.

“So yeah, there will also be change. But we’re really excited for the core portfolio we have now and there’s a real focus on the executive team who are very strong and a good group of people in terms of innovation and looking at the business a different way,” says Hill.

…

“I think Australia is probably one of the toughest markets for magazines worldwide. I think the advertising decline was faster and earlier than elsewhere. And if you look at the share of advertising dollars that go to magazines of the whole advertising pie it’s one of the lowest in the developed economies. And because of your geography, distribution costs are very high compared to other markets.”

Just as magazine publishers are confronted by challenges of change and lean into them, so should we.

More than six years in and the discount voucher loyalty program continues to be the best loyalty offering for newsagents. Sales reports show the value of the vouchers at marketing local newsagency businesses to locals as well as to one time only shoppers.

I mention discount vouchers today a reminder to newsagents that in thier newsagency software they have an awesome and proven tool for showing local shopper appreciation and driving local business engagement all at once.

Here are some data points based on an assessment of discount voucher engagement across a cross-section of newsagency businesses:

• 19.5% of all vouchers handed out are redeemed.
• 33% are redeemed the day of handing out.
• 33% are redeemed within a week.
• 33% are redeemed within 28 days.
• 18% of voucher redemption is for items priced at $25+ with a GP of 50%+.
• Magazines benefit the most from voucher use with magazines in 15% of baskets for which a voucher is handed out and magazines in 43% of baskets in which a voucher is redeemed.
• In every business instance assessed, the discount voucher loyalty program delivered a net revenue benefit to the business equal to around sx times the cost of the voucher value redeemed.

This is a business growth opportunity that is easy to setup and run, that genuinely differentiates your business and that provides you with a net financial benefit.

Here is an example of how it works…

I had a shopper who purchased a bag and a bow and received a voucher for $1.00. They used that to purchase two cards and with that they received another $1 voucher. They used that to purchase a  $20.00 item for a future birthday.

The business gave away $2.00 for an additional $33.00 in revenue to a customer who is not local and will not be back in the centre any time soon. The additional GP earned was $18.45. I am happy for this to cost $2.00 as banking $16.45 is better than banking nothing.

It is common for one time only or infrequent shoppers to end up with three transactions in a visit because of the vouchers.

Things are moving faster. Shoppers want more and sooner. Social media has educated people to seek instant gratification. Discount vouchers provide this.

Bottom line: this is something you can do for your business and your customers.

It can differentiate your business.

This is what comes up at www.gordongotch.com.au:

It is frustrating that News Corp. advised retail newsagents late about their Paddington Bear promotion. Their notification was too late for retail newsagents to fully leverage the opportunity to its potential. It’s a missed opportunity.

While the campaign may drive some incremental newspaper sales, it will not deliver the commercial benefit it could have delivered.

There are several suppliers in Australia with terrific Paddington Bear products, which we could have ranged to coincide with the promotion, This would have made it commercially viable to pitch the offer in prime space, front of store.

The poor communication from News Corp., is another example of supplier selfishness and ignorance as to the financial model for retailers today.

News should have communicated their plans between four and six months ago, to allow retailers time to plan the offer into their local business ranging and marketing plans.

This is our latest Harry Potter pitch in the newsagency. It is in a prime location and attracting plenty of shopper interest, and purchases. The display header was created by our graphic design team specifically for this in-store location.

With the Harry Potter play on in Melbourne right now at the massive Princess Theatre and the franchise of books and movies continuing to do well and the new Pokemon game, Harry Potter reaches many people, multiple generations. This is what makes it a successful licence for us to leverage in retail.

We source products from multiple suppliers and bring them together to branded location in-store you can see in the photo.

Harry Potter items are bought for gifts but also by lovers of the brand. This helps make it a valuable licence.

Newsagents often tell me that sourcing gifts for guys is difficult. An approach I favour is to not make one pitch of gifts for guys. Instead, I prefer multiple, smaller, pitches. This makes it easier to range and easier for the shopper to shop. We can move the smaller ranges around easily, bring some into better focus for a promotion, thereby offering a fresher view guy gifts.

Here is one of several gifts for guys pitches we have in-store now. The products are the banner, the lure. We figured that if we need to put up a sign saying gifts for guys we have got it wrong.