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

Month: November 2017

I was wrong about Gotch, they don’t care about newsagents

In my post last week about the missteps by XchangeIT and Gotch on the data handling for the new Gotch gift offer, The Market Hub, I said that I thought the issues wold be resolved at the Gotch end, negating the need for newsagency software change and therefore costs falling to software3 company owners and newsagents.

Thankfully, it appears that The Market Hub from Gotch will be established as a separate supplier through XchangeIT, negating the need for any software changes. Why is this relevant? In my opinion it reflects the poor preparation by Gotch and XchangeIT for this project and an arrogance that they expect others to invest capital on their behalf. But they are from the magazine distribution side of the business so I guess that is their usual approach.

Turns out I was wrong. Gotch does not plan to operate within the IT standards they helped to establish. They have advised they will use the magazine file structure to send gift produce delated data, breaking the standards. They will do this with XchangeIT watching them, yes, the same XchangeIT that fines newsagents for poor data management.

I think this disregard by Gotch of the IT standards they imposed on n newsagents speaks to their views on the future of the channel and, in particular, the distribution of print product.

If they believed in the channel they would invest in the right tech approach to their data challenge.

If they respected newsagents they would follow the IT standards they themselves helped to bring into place.

If they believed in their own future they would invest in that. Instead, they have invested in product and marketing but not in ensuring data flow within the standards they established.

I think this looks bad for Gotch. However, I suspect most newsagents will not fully grasp why this is an issue. This will make it easy for Gotch to say I am wrong and that my software company is the problem.

Here are questions and answers that define what is happening and why I have written here and previously as I have:

  1. Does the gift product data from Gotch and sent through XchangeIT meet the data standards they participated in developing? No.
  2. Can Gotch fix the problem at their end? Yes.
  3. Will Gotch fix the problem at their end? They have said no.
  4. What does Gotch want done? They want the software companies to change how the magazine data file is used, to enable the misuse of the file structure by Gotch to work with established newsagency software.
  5. Who does Gotch propose pays for the software changes? So far, me and the other software company owners.
  6. How could this problem have been avoided? Through discussion with the tech stakeholders long before launch as that would have taken away the time challenges given that the Gotch gift product range has now been launched.

Gotch may defend their position by saying my concerns are driven by my work with newsXpress. Such a statement would be untrue. My concerns here, as explained, are purely tech standards related.

If Gotch cared about newsagents they would respect the IT standards as much as they expect (and demand) newsagents respect them.

12 likes
Ethics

Lottoland announces end of betting on Australian lotteries

Luke Brill, CEO of Lottoland, send this message to customers this afternoon:

Hi Mark,

We’ve not seen you around in a while and it would be great to have you back on board. I’d like to keep you up to date with all things Lottoland.

It’s been a huge year for us, in which we crowned our first Millionaire, paid out over $15m in winnings and launched our partnership with the Manly Sea Eagles and the Northern Territory’s, Mitchell Street Mile.

These are milestones we’re immensely proud of and are a sign of things to come.

On a different note, sadly, I have to announce that due to regulatory changes, after November 30, we can no longer accept bets on the Australian Lotteries. Namely, Mon&Wed Lotto, Tuesday Lotto, Thursday Lotto and Saturday Lotto.

Single and Subscription bets on these lotteries that were placed before November 30 will be honoured and winnings will be paid as though you entered the official underlying draw. Subscriptions will not be renewed after this date.

We will continue to keep you informed about new products and exciting alternatives available. To give you the chance to explore, here’s an early Christmas present:

Whatever you spend on your next cart, the first $5 is on us!

Kind Regards,

Luke Brill (CEO Lottoland Australia)

The withdrawal from betting on Australian lotteries has been brought after a long battle including late but welcome, I am sure, engagement by politicians from all sides on the Lottoland threat to lottery retailers, Tatts and, most important, government revenue.

I think this note from Brill could reflect a change in messaging from Lottoland.

Brill specifically refers to a Lottoland purchase as a bet. This has not been key in their advertising to now.

Yes, it is a bet, something that even Tatts did not push back against until late in the day.

9 likes
Competition

The importance of acceptance cards in the card department of a newsagency

Acceptance cards are an often neglected part of the card story in newsagency card departments.

Tucked away, out of sight and not promoted, acceptance cards are always there, but often forgotten.

Yet, acceptance cards represent a point of difference opportunity for us, they and other cards with them can be promoted to pitch a point of difference inn our businesses over other card retailers. They can be leveraged to reinforce us as card specialists.

One way to pitch these small format cards is to talk about the keepsake value of the acceptance card. Wedding couples love having cards to look back on ten, twenty and more years later. Our range of cards in-store allow us to help create these wonderful memories.

Facebook posts talking about making memories is one way we can leverage the opportunity of acceptance cards and similar for our businesses. A thoughtfully written social media post could educate engaged couples about collecting acceptance cards for future memories.

I think too often we expect cards to sell themselves without any out of store call out. We can’t rely on cards to sell themselves at all. No, we have to continually educate people about card giving. We have to show the importance of providing the keepsake memory in a form people will cherish in years to come. This is why I write about acceptance cards today – they lend themselves to this type of promotion.

While you won’t retire on the mo new you make from acceptance cards, you will benefit from reminding people in the area you serve that you have a range and educating them about how loved acceptance cards are by recipients.

6 likes
Greeting Cards

Do you still stock erotic magazines?

There was a time when Australian newsagents received a broad range of soft-porn erotic titles. From what I see, however, that is not so much the case today. Seeing this post on Twitter this morning. referencing a title supplied to some UK newsagents it made me wonder what Aussie newsagents receive today.

Do you still have erotic or soft porn section?

6 likes
magazines

Fairfax advertising with the New York Times

This is something you would never have seen in print: a Fairfax masthead, The Age, being advertised on a New York Times platform.

That this is being done speaks to the extent of change we are amidst – not only in print media but in all areas of business. What was usual previously can be rare today just as what was taboo previously can be usual today.

Indeed, the Fairfax ad on a NYT site is a reminder that we cannot apply to today’s business world some expectations and rules from years ago.

In our channel for decades we lived with the understanding of territories. In the newspaper and magazine distribution space territories still exist. However, in retail, there is no such thing as a territory, certainly not when you can easily win a customer online. These are the days of retail without borders.

Related: B&T had an interesting report about cross-border sales.

It is in parts of our businesses where we practices of yesteryear continue that hold us back. While the world has moved on, in some parts of newsagency businesses the old way is the expensive and slow way. I am thinking here in particular of the old-school regulation around lottery products, magazine distribution and newspaper distribution. In each of these areas our ability to compete and be relevant is being held back by old practices and out of date compensation.

Some newsagents are breaking free and expanding their product portfolio way beyond what has been traditional for a newsagency and through this facilitating relevance in this new world. Hey if a couple of old-school newspaper publishers can do this so can we.

12 likes
Media disruption

Allens changing the perception of lollies

I love what Allens is doing this Christmas with their pop-up shops in some capital cities. I saw their Sydney pop-up a couple of weeks ago at Westfield in the centre of the city. They are getting people to pay over the odds for jars of personally selected lollies with a personalised name sticker. It is a very smart marketing move recasting the image of the Allens products.

What Allens is doing is recasting their image and driving appeal with a a broader pool of customers. Its is a smart move. Just about any business can do this.

5 likes
confectionary

Why Tatts is asking retailers questions about employee pay and conditions

Newsagents have been wondering why Tatts is expressing interest in employee arrangements in newsagency businesses. I have had plenty of questions and I know others have too.

This situation has come about because of the federal government passing vulnerable employee legislation following the 7-Eleven debacle. The Fair Work Ombudsman website sets the scene:

On 15 September 2017 the Fair Work Amendment (Protecting Vulnerable Workers) Act 2017 took effect. It makes the following changes to the Fair Work Act 2009external-icon.png (the Fair Work Act):

  • increase penalties for ‘serious contraventions’ of workplace laws

  • make it clear that employers can’t ask for ‘cashback’ from employees or prospective employees

  • increase penalties for breaches of record-keeping and pay slip obligations

  • employers who don’t meet record-keeping or pay slip obligations and can’t give a reasonable excuse will need to disprove wage claims made in a court (this is also referred to as a reverse onus of proof)

  • strengthen our powers to collect evidence in investigations

  • introduce new penalties for giving us false or misleading information, or hindering or obstructing our investigations.

Read what the Fair Work Ombudsman website has to say about franchisors that have a significant amount of influence or control over the business affairs of the franchisee:

These changes apply from 27 October 2017.

Franchisors and holding companies (a company that has control over subsidiary companies) can be held responsible if their franchisee or subsidiary doesn’t follow workplace laws about minimum entitlements, the National Employment Standards, awards, sham contracting, record-keeping and pay slips.

This will apply to franchisors that have a significant amount of influence or control over the business affairs of the franchisee.

Franchisors or holding companies could be liable for breaches or underpayments if:

  • they knew (or could have reasonably known) that a franchisee or subsidiary wasn’t following workplace laws
  • they didn’t take reasonable steps to prevent it.

We are working with franchisors, their advocate and advisers and will have more information in our Help for franchises section when the changes take effect.

Tatts is acting because of an understanding of that term – significant amount of influence or control over the business affairs of the franchisee.

It’s not only Tatts caught in this. Any business that can be claimed to have a significant amount of influence or control over a downstream business is in the cross hairs.

I think there will be plenty more news and engagement about this in the channel river the next few months.

The challenge is the definition: significant amount of influence or control. It is not as clear as it could be. Some politicians say the Fair Work Ombudsman has overreached. We will have to see how that plays out.

There is plenty of advice online outlining the obligations for franchisors and organisations like Tatts outlets.

For a government that said it would reduce red tape for small business, this legislation is considerably adding to it.

19 likes
Newsagency management

Newsagency marketing tip: shining a light on friendship

This image is another example of how an image can drive social media engagement, which then drives in-store purchases.

A brief moment taken to put items together and photograph them pays off when a post drives outcomes at the register. It is easy to do this yourself, without using an ad or social media expert.

This is simple and effective marketing, for which your business can be known and through which your business can break free of the usual advertisements that hit people on social media and elsewhere.

Easy visual marketing is the best given the platforms to which we have access to today.

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marketing

Newsagency management tip: don’t clog your data

Some suppliers load your computer systems with considerable more data than is necessary. Take Blueshyft, in my opinion they want you to load 100,000s of stock items because their tech approach is inefficient. Their inefficient approach is decd and abetted by XchangeIT. This is all so you can sell low margin agency product that leeches off your traffic rather than driving net new traffic … again, in my opinion.

Bloated data files are not good practice in any IT system.

8 likes
Management tip

Pet Barn leads on pet Christmas gifts

Visit your local Pet Barn right now and you see a consistent pet Christmas offer. I have been in four stores this week and the pitch is consistent, and good. Pet gifts are massive. I have had success in the dog and cat gift space through the year and at year end.

3 likes
Gifts

How is Christmas going for you?

Early year on year sales data I am seeing indicate a solid start to Christmas with some stores achieving terrific year of year growth. This data is from a range of newsagency business situations – city, country, shopping centre, high street, banner group and independent.

Card sales are strong, especially boxed cards with some stores tracking double digit growth. This is good news given the early sales of boxed cards compared to singles.

Gifts are strong too.

While it is too early to say how Christmas 2017 is compared to 2016, the early indications are encouraging.

How is Christmas going for you?

8 likes
Newsagency management

News Corp., launches digital-only subscriptions

News Corp. has launched app-only digital-only subscription offers for major capital city daily newspapers –The Daily Telegraph, Herald Sun, The Courier-Mail and The Advertiser.

This move is a departure from the model followed up to now, one whereby print editions were involved – even if only for two days a week as was the case for some packages.

While this move seeks to grow the digital subscriber base, it also offers the opportunity of speculation about where the company sees print in its future.

Mediaweek has more on the story.

With over the counter print sales remaining in steep decline, separating the digital subscription offer from a print offer makes sense. I know of people who said they would not subscribe while they had to take print product.

Checking the Herald Sun website, the subscription price is $3.50 a week. This feels high to me, compared to digital-only subscriptions for other titles with which I already engage. Time will tell.

In addition to recently upgrading there apps for its capital city mastheads, News Corp. is provoking a better online experience. When I was on their website looking at subscription offers, this popped up…

This reflects a best-practice approach to customer service – making contact easy. The only point of friction is the limited hours of access to speak with someone. Online today = 24/7 availability.

From a traditional newsagent perspective, the digital-only subscription move by News Corp. is a message to not rely on print newspapers as one may have in the past. Sales are only hearing in one direction.

While it feels like a slow slide, at some point, when it commercially suits a publisher, print editions of newspapers have been and will be cut.

The News Corp. move shows a company maintaining the customer connection regardless of the method of connection.

I don’t begrudge News Corp. doping what they are doing. If anything, their move is late. The needs of their shareholders are well served by offering digital-only subscriptions as they now offer.

Newsagents need to:

  1. Chase new traffic to replace newspaper shopper traffic.
  2. Manage newspapers in the business to have the lowest operating cost possible.
  3. Locate newspapers as an impulse purchase more so than a destination purchase.
  4. Only do newspaper promotions if they are stand-alone commercially viable.
  5. Understand the money they make from newspapers and make business decisions accordingly. If you are making good money, embrace and support the product to make more.

In fact, these steps should have been taken years ago.

15 likes
Newspapers

The extraordinary reach of online sales for a newsagency focussed on the future

This map shows the delivery points of online sales from the last few months for a Victorian based newsagency related business. The average sale value is in excess of sixty five dollars, not including shipping, which is charged for at cost.

The map does not show click and collect customers, and there are plenty of them.

All of the customers are not local to the business, not regular shoppers of the business. They have all been won through direct online engagement, direct to the website as well as through Facebook marketing.

I share the image to reflect the reach this business sees it has. Whereas a coupe of years ago it saw itself as a local business serving people who walk past or live within, say, ten kilometres. Today, the business reaches way beyond, it reaches to all of Australia.

I appreciate there are newsagent who say online is not a big deal and that social media is not useful for driving traffic and revenue. Data do not support those arguments. The opposite is true, and especially true for tech engaged small business retailers including businesses that identify or have identified as newsagencies.

This is how we can grow our businesses, by reaching shoppers located far beyond our four walls, by being accessible 24/7, by selling what people want and fulfilling through a appreciated timely service.

Footnote: I call this a newsagency related business as it is related. But it is not a newsagency as many would see it, not any more.

16 likes
Newsagency management

Would you include returned magazines for which you have received a credit in the stock you sell with your newsagency business?

A newsagency business changed hands this year where the vendor included returned magazines as part of the inventory for which then purchaser paid.

The stock take was not undertaken by people skilled in newsagency business stock takes.

The solicitor for the purchaser had never aced for a client in the purchase of a newsagency before.

The accountant for the purchaser had never acted for a client with a newsagency business before.

On the shelves at settlement was thousands of dollars of stock of magazines for which the vendor had been given credit by their magazine distributor. The magazines were not topped. Some were nine months old, yet there they were, on the shelves, for sale to shoppers.

The expert in the transaction was the vendor. They are at fault here. They defrauded Gotch, and through them the magazine publishers. They deceived the purchaser, causing them to pay for stolen goods and, through their actions, encouraging the purchaser to sell stolen goods.

My advice to the purchaser was to engage a new lawyer, to pursue the purchaser, to consider pursuing their original lawyer and to advise Gotch formally of what was discovered.

Gaps in handling magazines allow unscrupulous operators to get away with crimes like those outlined above.

Gotch should verify all return claims. Publishers should demand it, and be prepared to pay for it. While I understand they do spot audits, which have found discrepancies that have led to newsagents paying compensation, that is not enough. The situation I have outlined above should not have been allowed to happen.

Every returns over claim should be caught.

Gotch and the newspaper publishers should consider working with the ACCC on an authorised process for handling the change of ownership of a newsagency business. This could ensure the stock take is undertaken by a registered, skilled and ethical stock taking business.

Sadly, it is not the first time I have heard a story like this and, I suspect it will not be the last.

It has been a tough baptism into newsagent life for the purchaser. Hopefully, they have learned to be more curious about situations they encounter in business for the first time and to have a healthy questioning about those they deal with.

8 likes
Ethics

Gordon and Gotch moves into gift wholesaling and fails to adhere to data standards (with the help of XchangeIT)

Earlier this month, Gordon and Gotch launched The Market Hub, a wholesale business offering toys, gifts and other items.

In my opinion, Gotch should get its magazine distribution business right first. There are too many mistakes, too much oversupply, poor newsagent customer service and a poor tech platform through which newsagents connect.

As I have noted previously, Gotch could grow magazine sales for publishers by providing better service to newsagents, through a better tech platform. Indeed, the poor Gotch tech interface is a big barrier to newsagents taking on new titles.

There are items offers by Gotch through The Market Hub with a suggested retail price that is higher than the original supplier suggested retail. This potentially sets the participating newsagents as expensive and creates a false margin perception in my opinion.

Some items in the Gotch offer need understanding and support to drive sales success. Simply purchasing product and stocking it is not enough for such items.

FAILURE TO ADHERE TO DATA STANDARDS.

It is in the data side where I have concerns with how Gotch has gone about the launch of The Market Hub. Gotch sent to newsagents an EDI file using a format designed for magazine data. XchangeIT passed through the file, without testing.

The file contained errors. Gotch and XchangeIT people were clueless and, in my opinion, disengaged. It fell to the COO of my newsagency software company to detail the errors in the Gotch file sent by XchangeIT.

A big challenge was that Gotch was the supplier. The way the standard plays out is that having one company provide data for two very different types of products through one file format is problematic. yet, for several days, Gotch and XchangeIT resisted establishing a second supplier for Gotch to send through their data for The Market Hub. 

While I don’t know about other software companies, XchangeIT agitated my newsagency software company, Tower Systems, to change its software to serve the approach Gotch and XchangeIT wanted to take. What this meant is they wanted me to personally fund, to the tune of many thousands of dollars, changes so they could bend XchangeIT data to work with standards not designed to accomodate the data they wanted to send.

I made it clear to them that out of all of us at the table, Gotch, XchangeIT and Tower, only I was being asked to personally fund any work. I refused. Instead, Tower outlined an approach they could take with no cost – by sending the data from a separate supplier.

Thankfully, it appears that The Market Hub from Gotch will be established as a separate supplier through XchangeIT, negating the need for any software changes. Why is this relevant? In my opinion it reflects the poor preparation by Gotch and XchangeIT for this project and an arrogance that they expect others to invest capital on their behalf. But they are from the magazine distribution side of the business so I guess that is their usual approach.

What should Gotch and XchangeIT have done differently? They should have engaged the software companies before sending the file. They should have followed the standards. The should have established a separate supplier for this new Gotch business. They should have thoroughly tested the data they sent.

Instead, they worked in secret and rush to newsagents flawed data, compromising the integrity of the data standards that XchangeIT ferociously protects when it comes newsagent data. It is a pity they are not as tough with themselves and Gotch as they are with newsagents.

20 likes
Ethics

Newsagency management tip: understand what insolvent trading is

A business owning three newsagencies went broke months ago, owing close to two million dollars. The liquidators report was released recently, declaring that the business had been trading while insolvent for at least two years. This finding could have serious consequences for the directors.

ASIC defines insolvent trading:

An insolvent company is one that is unable to pay all its debts when they fall due for payment.

Yes, the definition is that simple. The director of the company to which I refer above was a blowhard, a gunna my mother would have called them. Gunna do this or that, with an attitude that they were an amazing business operator. Except, they were not. Many suppliers to the channel were left out of pocket along with banks and the ATO – and through the ATO, all Australians.

In my experience, often, the louder someone is about how great they are in business the worse they are.

ASIC provides advice on what to do if your company is insolvent:

If your company is insolvent, do not allow it to incur further debt. Unless it is possible to promptly restructure, refinance or obtain equity funding to recapitalise the company, generally, your options are to appoint a voluntary administrator or a liquidator. The three most common insolvency procedures are voluntary administration, liquidation and receivership.

ASIC has plenty to say on insolvent trading, including:

If dishonesty is found to be a factor in insolvent trading, a director may also be subject to criminal charges (which can lead to a fine of up to $220,000 or imprisonment for up to 5 years, or both). Being found guilty of the criminal offence of insolvent trading will also lead to a director’s disqualification.

ASIC has successfully prosecuted directors for allowing companies to incur debts when the company is insolvent, and has sought orders making directors personally liable for company debts. ASIC also runs a program to visit directors, where appropriate, to make them aware of their responsibilities to prevent insolvent trading.

If you think you may be insolvent, reach out to someone you trust for advice and to be by your side as you navigate the challenges.

The newsagent in my story did not want help. They said there was no problem.

16 likes
Ethics

Newsagency marketing tip: pitch Kris Kringle gifts

Right now is the time to pitch Kris Kringle gifts. These are gifts that usually focus on fun and sell for anywhere between $10 and $50.

We are enjoying terrific success with a range of fun gifts right now, for workplace gifts. Starting in a week or so we will focus more on heartfelt gifts, for family Kris Kringle gift opportunities.

FYI, this beer popping candy has been a hit!

3 likes
Gifts

Officeworks actively promoting 2018 school books business

Go into any Officeworks store and you are greeted by their school books pitch for the 2018 year. Their pitch is simple and compelling: save time and save money.

Right now, this is the pitch newsagents need to be making if they are in a competitive situation for school book orders for the 2018 year. The two are easy to pitch. The first is about ease of engagement and the second is about margin.

Given how Officeworks sells, it is tough to beat them on price for everyday items. It is in special interest areas where you have your best opportunity.

In terms of ease of engagement, you can take practical steps to ensure this is what you do.

Now is the time, however. If you want school book business for the 2018 year, now is the time to be pitching. Taking a lead from the Officeworks focus is smart, but in your own style, with a local focus and with a value-add that could be unique to your business.

If you are looking for school books / booklist business in 2018 and not already pitching for this  business, you are behind, get to it, NOW!

Note: you don’t need to be near them to see them as a competitor, for Officeworks is everywhere thanks to engaged online campaign.

3 likes
Stationery