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

Month: June 2017

Interest free LayBy is dangerous

A retailer called me Friday last week to discuss LayBy options. They are finding it tough to compete in the toy space with majors and they are considering offering interest free LayBy run and managed in-house.

Their plan was to offer free LayBy for items over $100.00 and to give customers up to December 24 to pay off the purchase.

Once I explained to them their retailer obligations in relation to LayBy they were having second thoughts. Their plan was to have rules in place ensuring they would be paid un full by December 24 regardless of whether the customer collected the goods. The ACCC website has something to say about this. Here is their text re termination fees:

You can only charge the customer with a lay-by termination fee if they cancel the agreement.

There is no set amount or percentage for a termination fee, but it must not be more than your ‘reasonable costs’ relating to the lay-by agreement (for example, storage and administrative costs that apply to the lay-by agreement). What is ‘reasonable’ will depend on the circumstances and you should be prepared to justify that your costs are reasonable.

If the customer’s lay-by instalments do not cover the termination fee, you are entitled to recover the outstanding amount as a debt. This should be clearly stated in the lay-by agreement along with any other details of termination fees so that your obligation to have a transparent lay-by agreement is fulfilled.

Apart from the termination charge, you are not entitled to damages or any other remedy for the termination of the lay-by agreement.

Shoppers are knowledgable. There is no dodging the rules on LayBy.

I don’t see the value in an interest free LayBy offer. Unless people have skin in a transaction they don’t as connected with or obligated to the purchase as I would like.

Making it easy to get a signature on a piece of paper is not a smart move in my view. The more important focus should be on getting a firm commitment, a full purchase. you do this through product knowledge, customer service and adding value. It is the adding value in the toy space especially that is hard … but it can be done. You have to be a smart retailer to do this.

Major big-business competitors are not smart, that is why they go with interest free and similar deals as that is all they can offer.

I urge small business retailers to not get lured into that mugs game. There is no good news for the business.

11 likes
Newsagency management

Business management tip: be consistent with how you handle clearance lines

National retailers in the US are terrific at managing quitting inventory. Most have a structured approach to what they call clearance lines. This photo is from a Staples store I visited last week. I saw similar clearance locations in each of the six Staples stores I visited in two states.

Having space set aside, permanently, for clearance lines, ensuring it is  visually separated from your usual displays, calling it out with a bold colour and placing product for a clearance look – i.e. not too pretty.

I can see this working in all sorts of businesses, from the traditional newsagency through to those with a focus on high-end premium retail. You would set aside the space appropriate two out space situation and your inventory quitting strategy. You would create the clearance offer appropriate to your type of business.

This is a better approach than putting SALE signs up here and there. A fixed clearance location provides customers with certainty. It shows you are serious and consistent in your approach. This encourages confidence.

Here is an example of a different approach, something more refined and professional:

This photo is from a US card and gift shop. I took the photo a few months ago while on a retail tour.

I like both approaches I have shared here. Each has their place. While I am more likely to use the second in my businesses, the first would be okay in the right nook of the business.

The key is to have a clearance location permanently set aside and to signpost th8is professionally.

The goal is to sell through clearance stock faster than you would if you did not take the structured approach I am writing about here.

When it comes to quitting stock, the sooner the better. hence the need for a clear and disciplined outcome-focussed approach.

I hope this is useful to retailers as they contemplate what to do with stock they are exiting from their businesses.

17 likes
Management tip

Sunday newsagency marketing tip: make your own videos

A great way to differentiate your business online is with your own content. Take out your phone and film that hot product that is easily demonstrated in a video. It works a treat and can show your business off with unique content. Show, don’t tell as they say.

Here is a short and simple video I used a few weeks ago with terrific success.

5 likes
marketing

A newsagency closure

Channel 7 Perth did a story this week on the imminent closure of McGhee’s Newsagency in East Victoria Park, Western Australia. I have spoken with Rod plenty of times, at workshops I have run in Perth.

My view is that newsagency closures are avoidable regardless of location and availability of capital. The most important requirements are desire to stay open and preparedness for change.

I respect the McGhee family and their history. However, the future of this channel needs stories about the future and not the past.

11 likes
newsagency of the future

More on the value of licences to retailers

Further to my post yesterday about licences, here is another example of the Wonder Woman licence working a treat at extending the appeal of the business. We have a wonder Woman costume for a dog, in our dog costume section. Customers love it. It’s a traffic generator, so I love it too. Products like this can help us appeal way beyond what people expect from our businesses.

The more we do this, the more we appeal outside what people expect of our businesses, the more we strengthen the appeal and value of ur businesses. This activity is vital in trading away from the newsagency shingle.

Kind of related to this, years ago we jumped deep into plush. Another person in the newsagency channel mocked this move. Now I notice they have quietly hopped into this. This financial year, the low price point everyday plush will be worth more than $80,000 in one of my businesses and high end plush, well a terrific value too.

My point is that what may look unusual or not a good fit can be if you work it and position it well with shoppers.

We are retailers after all. Retailers sell what their customers want.

6 likes
Gifts

Easy up-sell with newspapers

This placement of two different magazine titles with daily newspapers in the newsagency has been working well for us. It took a few seconds to setup and cost us nothing to create.

In fact, the Tour De France program placement with the Herald Sun newspaper will work far better than if we had done a power end display. It is working, a treat!

Note to magazine publishers who ask for power end displays – they are not worth the space and labour cost. What you want is a tactical placement, like this one. It is perfect for leveraging the destination newspaper customer.

Oh, and if newspaper publisher folk don’t like it – suck it up, you are not paying for the space.

5 likes
newsagency marketing

Licences help drive sales in retail

Having the right licenced product at the right time is valuable in this market where licences are stronger than ever thanks to movie and TV franchises that are popular with demographics of value to us.

Take Wonder Woman. The new movie is a worldwide hit, so much so that nostalgia product, based on the original branding, is working a treat.

Being in front of these trends by watching licensing news from overseas and connecting with the right suppliers in Australia helps retailers to maximise the opportunity.

It is hard work, staying on top of these things. But valuable work when it works and you have a good range of what proves to be a hit franchise.

Licences are especially useful at attracting new traffic to the shop, traffic that would not otherwise consider shopping with you. The key to leveraging this new traffic to maximum value is to have items that appeal to the shoppers beyond the traffic generation license itself.

4 likes
Newsagency management

Meet your online competitor, in a garage near you … or a continent away

Last week in Chicago I got to look at a range of online fulfilment solutions. The most interesting were the fully automated facilities aimed at small operations.

Whereas in the past it cost hundreds of thousands of dollars to establish an automated warehouse for even 500 items, today that can be done for under ten thousand dollars.

The photo shows a small part of one such facility I saw up and running. It picks goods, feeds them to a packing line where they are packed, sealed and labelled ready for collection. Hands free.

These facilities run with a considerably lower labour cost that our small businesses that fulfil for online sales. It is a way tech engaged online competitors are able to sell at lower costs, they have lower overheads.

While there is plenty of discussion abut websites we can see, there is little written about the back end, the fulfilment side of things, where tremendous advances have been made in delivering access to solutions with considerably lower cost that has been the case.

I spent two and a  half days diving deep into this side of online retail, looking at many different fulfilment options from the tech-centric to low-tech and highly personal. It was fascinating and illuminating given the moves Amazon is just months away from making in Australia.

The start-up costs for a pure online retail play have never been lower. This low barrier to entry and the flexibility of a start-up compared to a legacy business like then traditional newsagency presents challenges we need to confront. That starts with awareness. hence this post.

2017 is not even half over yet and it has already delivered more innovation around online and fulfilment than the last two or three years combined, innovation that is cost effective for small businesses and start-up businesses.

Now, if you think this is not relevant to you, I say it is as even today there are online businesses taking revenue from you, delivering to people who are local to you.

I have evidence of businesses, for example, in Western Australia, taking revenue from local high street businesses in suburban Sydney. People purchasing online worry less about local and more about the brands they purchase.

13 likes
Competition

No, Tatts is not promoting your business online

Here are recent tweets from Tatts via their TheLott Twitter handle, promoting online purchases. No mention of retail. Your branding commitment adds value to their online marketing, for online purchases. This is your competition:

Oh, and here is one that popped up in the Twitter feed on my phone this morning:

The Use App button is what they want you to press, that is their call to action.

14 likes
Competition

A gift for retailer friends

I saw this mug in a shop last week. They also had a badge, shot glass and several other items with the same message. This would be a gift for anyone you know who works in retail. It made me laugh as I thought I knew what it said, and then I read that last word.

6 likes
Gifts

Trade show closures reflect challenges for wholesalers

2017 is proving to be a tough year for trade shows in retail categories related to newsagency businesses. There have been several trade show closures this year. While the organisers have pitched various reasons, it is falling numbers through the doors that reduce supplier engagement and that is what, ultimately, leads to the close of trade shows.

From where I sit, as a retailer and as a supplier to retailers, trade shows are less efficient today for reaching retailers who can and want to engage.

Take the gift fairs. Whereas in the past the aisles would be packed with retailers spending big, this year, and last, the aisles are less crowded and then purchasing is more cautious.

Competition does this, it is to be expected.

Smart suppliers are not relying on the trade shows for a big boost in sales. Instead they themselves have an omni-channel approach to reaching their customers – online, social media and more. This is exactly what smart retailers are doing to reach their customers. It is not different to trade shows.

The best wholesalers / suppliers are those with stunning websites that make buying easy, enable you to al most touch their products and that reflect the lower cost of doing business via a website than doing business at a trade show or through one on one rep visits.

We have very few suppliers to retail newsagency businesses with stunning websites. Whereas there are more overseas suppliers with stunning websites and they are positioned to get more business as a result.

A stunning website from a supplier in my opinion is one that teaches me about products, makes what I do in retail with the products easier, supports my local store marketing and introduces me to new products that expand the reach of my business … a website that dopes all of this 24/7, without spending time being social and in a way that excites me.

I think there is a place for trade shows. However, that place is different to what it was in years gone by.

In the tech side of my business, the trade shows I am getting the most out of right now are those new to me, where I am likely to learn plenty to expand my horizons and interests.

It is important for suppliers and retailers to understand the changed role of trade shows, to have a common purpose where possible, so the expensive events work for both sides.

6 likes
Newsagency management

Gold Coast website / POS software workshop added

I have added a Gold Coast session to the regional workshops I am running to help retailers equip their retail business to confront the changes in retail, transact online and compete with big businesses, including Amazon.

The sessions will include information about when people shop, what they are buying online and the winner and loser states when it comes to shipping from and to.

I will show how small business retailers can be successful with this – through Australian and US examples.

Through live search you will see what it looks like to be the top result in a Google search and the steps taken to get there.

Here are the dates for the workshops. Click on the city name to book your place:

  1. Coffs Harbour. June 19. 10am. Novotel.
  2. Tamworth. June 20. 10am. Leagues Club.
  3. Newcastle. June 21. 10am. Mercure.
  4. Dubbo. June 22. 10am. Quest.
  5. Wagga Wagga. June 23. 10am. International Hotel.
  6. Cairns. June 26. 2pm. Novotel.
  7. Townsville. June 27. 10am. Mercure.
  8. Mackay. June 28. 10am. Mackay Grande Suites.
  9. Rockhampton. June 29. 10am. Quest.
  10. Gold Coast. July 5. 2pm. Sofitel

I will share insights on how small business retailers around the world are using website connected POS software to win online sales.

I will explain how to get to the top of Google search results and demonstrate with live examples what this means.

2 likes
Newsagency management

An excellent social media / customer / magazine engagement story

I love this story from newsXpress Mount Morgan and their sharing of a photo sent to them by a customer who created a beautiful piece from a pattern published in Better Homes and Gardens.

I love the story because the customer sent the photo to newsXpress Mount Morgan via Facebook and because newsXpress Mount Morgan shared it on Facebook with their customers. This is excellent use of social media.

This engagement is one example of excellent use of social media, showing a wonderful business / customer relationship, built around a stalwart brand in the business, Better Homes and Gardens. It demonstrates a close and appreciated customer relationship, on show for all to see.

Big businesses cannot manage such local and personal relationships.

How this story unfolded and was managed is an excellent example in the value of the free platform that is Facebook for small businesses. Kudos too the folks at newsXpress Mount Morgan for handling this without being sales in their approach.

I get that some n newsagents are not interested in Facebook, that they think they are too old or not tech capable enough to use it. The thing is, Facebook is like the fax or mobile phone when they first came out.

Facebook is a basic business tool. In my view, if you are in business you must be on Facebook.

These are not times to be timid about being public. If you are in retail your business needs customers. Facebook and similar are where those customers are, where they talk and, yes, where they buy.

11 likes
Management tip

Sunday newsagency management tip: look at the inventory performance gap

Business gurus often talk about the 80:20 rule, they find all sorts of ways to apply it. In newsagencies, we could apply it by saying that 80% of our product revenue comes from 20% of our products.

It is easy for newsagents to get this stat for their business. That’s my tip today, find out what your inventory gap is, the gap between the uber performing inventory items and the gap down to the rest, the products that don’t perform adequately for your business.

5 likes
Management tip

Entertainment is vital in all retail experiences

What we know about social media today is that people engage more with content that is entertaining. This is also true for websites in plenty of retail segments. An entertaining site attracts people, holds them and drives engagement.

I say we know this because of data presented at just about every online retail conference I have attended in the last two years, most recently in Chicago this week.

There is no border between what people want and engage with online or in store. Entertainment is as important in store as it is online. The questions are: what is entertainment and how much is needed. These are vital questions because in our businesses, said raditional and transitioning, space, time and resources are limited. So, I suggest a simple approach, within our means.

Here are some examples of what I am talking about here.

  1. Buying. Buy products that lend themselves to in store demonstrations. Demonstrate them. Not all at once, but on rotation.
  2. Jigsaws. If you sell them, setup a table and encourage people to engage.
  3. Cards. Have a small table where people can sit and write cards. Scatter this with text suggestions.
  4. Craft. Let people do the craft works they want to do in your shop rather than at home.
  5. Show off. Have a place where people can show off how they use and interact with what you sell. This could be a place for photos or shelves on which people display art works or similar.

There are plenty more ideas. This list here is designed to get to you thinking of ideas appropriate to your specific business. If you are in a marketing group they should be a font of knowledge in this space for you.

Next time you see someone on social media on their phone, given that 80% and more of social media use in Australia is on phone and tables, watch the swipes. See how much time people give for what they see. Usually it is seconds. Yes, that is all yo have to grab the attention of people on their phone. It is similar in store.

Entertainment is key to making your store appealing for new traffic and appealing for existing traffic in store already. Do nothing and you will achieve barely average results.

9 likes
Newsagency management

A boost for newsagents in the UK election

If you check Twitter you will see an active campaign of people buying up anti Labour newspapers and binning them. Here is one example with plenty of likes and re-tweets:

Here is another that gained similar traction:

This is an interesting form of protest. I wonder if it will take off in Australia, particularly with the more biased mastheads.

9 likes
Ethics

No holding back on the front page

Check out the from page of the New York Daily News in today. Talk about a front page to grab attention. There is nothing like a good political scandal to get people more engaged with mainstream news, including newspapers. Trump is said to be thin-skinned. I wonder how this cover will play with him.

2 likes
Newspapers

Tatts fails to promote its retail network despite claims they do

While Tatts reps have been telling retailers that Tatts regularly promotes its retail network I am yet to see evidence of this in online ads by Tatts. These are ads placed by Tatts on news sites and social media sites pitching the latest jackpot or product offer.

All the online and social media ads I have seen the ad is about promoting immediate purchase through their website or app. I don’t recall seeing a pitch for the retail network or a link to a facility through which I can easily find my local retailer.

Now I need to note that Tatts is doing what I would do if I were them. For shareholders they need to be selfish and drive the best outcome for their business, and this is to drive online purchases.

The problem is, Tatts demands you spend a ton of cash promoting their brand. Part of their pitch is you do this for us and we do similar for you in our marketing. Maybe I have missed, it but I am not seeing Tatts promoting their retail network. Either they start promoting their retwith ail network or they stop saying the will.

The bigger challenge is how can Tatts partner with the retail network? 24/7? This is what Tatts should be working on. The retail network is a true asset to them. I’d go as far as saying the Australian retail network is the best retail lottery network in the world. Yet Tatts does not treat it well. Tatts actually promotes against the network, as I have written here.

Given the connection being demanded by Tatts between in store and online I think the most immediate connection Tatts could drive would be establishing a fund from their direct online sales, setting aside a portion of their own commission to be rebated to retailers based on the location of purchasers and their retail stores.

This single move would encourage retailers to work with Tatts as it monetises online engagement.

I appreciate this is not a new idea. I and others have pitched it before. The thing is, it is vital now given growth in online isales and the importance of newsagent in store branding to the broader Tatts message.

But the folks at Tatts don’t get this. They only see what works in the short term of their share price. My idea would benefit their share price but over the longer term.

The Tatts retail network is a asset of Tatts, if only they gave retail network the respect it deserves, if only their actions in terms of marketing reflected the words of their representatives when speaking to retailers.

31 likes
Lotteries

Fidget spinners dead in retail

One way to tell is a retail product is dead is when you see it as a free gift at a business trade show. In Chicago today at the Internet Retail Conference & Exhibition six exhibiting companies were giving away fidget spinners. Most were giving them away without qualification, like they were offloading them.

5 likes
Newsagency management

What next for Officeworks?

With the sale of Officeworks off the table I expect Wesfarmers will increase engagement with the group, to lift performance. This could mean further diversification by the group, further into areas impacting us.  That is what I would do if I were them.

We already see Officeworks playing well in the social stationery space as well as some gifting, games and puzzles. Plus, they are very strong in calendars.

The extent of change already seen at Officeworks over the last two years is instructive to newsagents contemplating change. This is a reason I visit Officeworks stores regularly. There is plenty to learn – not necessarily to copy but certainly to learn.

While city newsagency businesses are most obviously impacted the most by Officeworks, regional stores are impacted too because of their strong online presence.

When able, visit Officeworks and take a close look at what they are doing. Be sure to check back regularly as the change between visits is well worth seeing. I certainly find it worthwhile.

While we are talking about Officeworks, look online at what Staples is offering. Their penetration is increasing in Australia from what I understand and it is happening mainly under the radar – because you don’t see the business they are doing.

Staples is ahead of Officeworks when it comes to funky and on-trend products. Here are two examples they have in-store in the US right now, both compelling offers, both expanding the reach of what we consider to be stationery.

9 likes
Stationery
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