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

Month: July 2017

Follow the money: Invest for growth in your newsagency

One of the challenges facing legacy product suppliers to the newsagency channel is the success many of us are having with new product suppliers.

It is only natural that newsagents, like other business people, prefer to invest in traffic, GP and, ultimately, bottom line P&L growth.

Therefore, newsagents are more likely to invest in products and infrastructure supporting products that fit the growth story. It is also why newsagents are less likely to invest in legacy products and the requirements of legacy product suppliers. It is why legacy suppliers struggle to get attention of newsagents.

The extent of transition in the newsagency channel is encouraging. Newsagents embracing new categories and through these new suppliers. It is leading to shop layout and fixture changes as well as technology changes as newsagents pitch new products and categories through their technology in ways that help attract new shoppers.

Our legacy suppliers who historically have relied on bully tactics and being required products are coming, slowly, to realise the new world, that their products are not as needed, that the expensive and anti-competitive processes are not appreciated by newsagents. Well, some at least. There are others who continue their ignorant bullying ways.

We are in a golden era of change in our channel. There are winners and losers. Market forces are at work, and this is a good thing.

When contemplating a request from any supplier, consider the new traffic, GP growth and bottom line benefits. If the request does not improve these then maybe ignore it. The suppliers of legacy products who handcuff you to anti-competitive processes may one day get the message.

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Management tip

Should newsagents refuse to sell today’s Daily Telegraph?

The front page if today’s Daily Telegraph is nothing but political propaganda in my personal opinion. It pushes an agenda that has nothing to do with news of the day. The front page story is fantasy fiction, designed to rally readers to an opinion about the Labour party that News Corp. wants.

This is not journalism. It is not what newspaper publishers should put out. It is the pushing of an ignorant fear based agenda, something News  worldwide has a track record for.

There are no facts in this piece. 

This game by News Corp. is considered more important than key stories of the day, news stories.

It is typical for a selfish publisher that runs its agenda ahead of reporting the news, reporting the facts.

You only have to look at their coverage of the NBN over the years. The originally proposed NBN could have been the Snowy Mountains Scheme for our time. It would have delivered a productivity boost off of which plenty of companies could have thrives, It could have fostered start-ups that could have changed towns and cities.

Instead, this publisher ran a campaign that resulted in the junk NBN we have today, something that is holding our economy back.

Yes, these are my opinions. However, I have some experience with which to form the opinions and some knowledge of what has been done in some US states, New Zealand and Estonia. Experience running a software company that serves 3,500+ small business retail businesses that rely on fast and easy internet access.

Newspaper publishers should not run agendas.

Shame on politicians for pandering to them, to get to be part of the News Corp. agenda.

If I was a newsagent in NSW I suspect I would not offer the Daily Telegraph for sale today.

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Ethics

Different standards from Tatts on digital marketing screens

I visited a newsagency with Tatts last week that was forced to install two screens, even though financially the business could not justify the spend and Tatts could not provide any indication of the commercial value too the business of the spend.

Yesterday, I visited another newsagency that does, I estimate, at least four times the lottery turnover of the earlier business, yet they have been required by Tatts to install only one screen.

While the second business has less space, they do have room for two screens. Close to two thirds of GP for the business comes from Tatts.

There appears to be an inconsistency from Tatts in the screen requirement, one screen versus two screens.

If the trigger is revenue, the second business I mention should have two screens. If the trigger is commercial value to be gained from the screens, the second business I visited should have two screens. But they have one. And the business that could not afford two screens has them, and there is no evidence they offer value.

How Tatts has been able to get away with demanding small business retailers make capital investment in technology not involved in vending the product and without any documented business case is dreadful.

I continue to be glad I do not have Tatts in my businesses.

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Lotteries

Ridiculous House of Wellness ad catalogue

It is frustrating newsagents continue to be asked to hand out The House of Wellness ‘supplement’ with the Herald Sun when the publication is nothing but a glorified Chemist Warehouse ad platform. It feels nothing like a value-add supplement. Rather it wastes space and labour.

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Newspapers

New wage rates and penalty rates in place

Click here for a copy of the new General Retail Award rates from Fairwork. It is important you take time to think about what you will do in your business about this. It is not as simple as applying the new rates, especially the lower penalty rates.

In March I wrote about why I will not apply the lower penalty rates in shops I own.  In case you missed it, here is what I wrote then and stand by today:

Why I am not embracing the reduced Sunday penalty rates in my retail business

Here are my reasons for deciding to not embrace the Sunday penalty rates decision in my retail businesses:

  1. I value my employees. To pay them less as a result of the decision could suggest to them they are worth less. I have hated it when suppliers reduced margin or commission and argued then that they value me and my business less.
  2. I want to be competitive for good labour. Paying a competitive rate is key to this.
  3. The business reward. It is open to employees who are now told their pay will not be cut to return the favour to the business.
  4. Competition. A range of competitor business have made a similar announcement.
  5. While of economy fairness. While I agree with the decision, it should only be taken as a whole of economy review that fairly adjusts economic touch-points for all and not only salaried workers.
  6. Weighing everything up it is the right thing to do.

This is not a permanent decision. It is possible I will modify my position as the marketplace situation evolves. If I did and thereby embraced a saving in labour costs, I anticipate through would be invested in more hours.

All business owners need to reach their own conclusions on this matter. Unfortunately, as a country we are bereft of leadership on broader issues that should be confronted in any economic setting adjustment as has been done with Sunday penalty rates.

Think about what you feel is right for your business. This has to be a personal decision. The goal of this post is to encourage you to make your own decision, regardless of what the actual decision is.
I say make your own decision as there are implications for what you decide.

If, for example, you decide to not cut Sunday rates, there should be a benefit from employee engagement, as appreciation for your support. So, I would encourage discussion if this is your decision.

If, on the other hand, you decide to cut penalty rates, explain why this is important for the business and how that connects back to employees.

Unfortunately, this issue is highly politicised as a battle between classes. The reality in small business retail and small business generally is there is rarely a class. Indeed, employers often make much less than many in their workforce are paid.

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Management tip

Sunday newsagency management tip: stop and think about why you scan sales

Too many newsagents use software in their businesses as a glorified cash register. They track stock in, scale sales, scan returns and that is it. Rarely do they manage the business by the numbers.

Next time you scan an item being purchased at th counter, think why? Think about whether you actually use all the data being collected and cultivated.

My challenge today is that you actually use it.

I am prompted to write this because if data I see in a report from a retail business I know of. They have excellent data, that chronicles the steady decline of the business and shows no action to arrest the decline. This is a business that uses their software as a glorified cash register. What a waste.

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Management tip

Is shopper theft on the increase?

I have heard from more retailers in the last two weeks about shopper than at any time in recent years. It leads me to ask the question:

Is shopper theft on then increase?

Please comment and provide information about what you are experiencing.

In my own situation, we spot stock take key parts of the business, those valued items near the front of the shop and items people are known to covet. Our magazine arrivals and electronic returns process shows if any theft of magazines has occurred, and has done for years.

The bigger challenge is with higher value specialty items for which we consider security to be good. A theft yesterday tells us security needs to be better. I is that experience and what others have told me over the last couple of weeks that got me asking the question.

One newsagent told me abut the customer who brought one card to the counter but “forgot: about the three cards in the baby pram. Another told me about the customer who put  gift card in their broken arm sling and was disappointed to learn it would not work unless activated. Another told me about a customer who loaded four reams of paper under their supermarket shopping bags in a trolly.

While these stories are frustrating, it is the stories we do not hear about, the theft discovered long after it have been done, that frustrate the most. This is where how and when you check your stock matters.

With so much business now done online and accurate stock on hand data key to business success, theft can embarrass the business more than ever.

Have you found shopper theft to be on the increase?

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theft

New newsagency benchmark study launched

I have emailed newsagent ts this morning with an invitation to participate in he Q2 newsagency sales benchmark study:

I am preparing a fresh benchmark study for the newsagency channel to look at the latest sales trends overall and in key product categories for the second quarter of 2017. This quarterly newsagency sales performance study will help newsagents see the future based on the data trends. Click here for my last report.

How to participate.

  1. Please run a Monthly Sales Comparison Report for 01/04/2017 – 30/06/2017 compared to 01/04/2016 – 30/06/2016.
  2. Tick the category box. IMPORTANT.
  3. Tick to exclude home delivery and sub agent data.
  4. DO NOT tick the supplier box.
  5. Preview the report on the screen. Save as a PDF and email this to me at mark@towersystems.com.au.
  6. Read the report yourself and see what it shows you about your business.
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Newsagency benchmark
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