Retail trends of note in a COVID-19 impacted world
I wrote this note to customers of my POS software co. yesterday and thought I’d share it here as it talks to some of the opportunities we are seeing, opportunities some newsagents are already leveraging.
We are grateful for the terrific insights shared with us by many retailers across multiple retail channels and in a variety of situations. These insights have enabled us to put together the following to share with you.
In the last week we have run 8 video conferences for retailers. These have provided terrific insights. We have also participated in teleconferences with suppliers to retailers. Collating all we have heard has helped create what we share here.
COVID-19 is not impacting retail in a uniform way. The differences present opportunities that can be leveraged…
- Regional and rural businesses are less impacted. More than 100 retailers in three different channels report an increase in sales in the last week. We think this is because people working from home are doing it from holiday homes and country properties. Some have moved back with family for the duration.
- Large shopping centre businesses, except for supermarkets, are in a world of pain. [Note: I wrote this email Saturday mid afternoon. At 4pm that day I got an email from one of my own shops in a Westfield centre and sales were almost double what we had been expecting. Plush, for example, hit $771.00 for the day, which is up for a Saturday. So, there … hmm.]
- Suburban high street retail results are patchy. Some good news but mainly declines.
- Some previously challenged categories are performing well – newspapers and magazines are having a terrific sales surge. In the magazine space, crosswords, real life, gossip and relaxation related titles are doing particularly.
- Games and jigsaws are hero product categories. Some of the more recent release games are doing particularly well. To balance this, we’ve been told of a slowing in outdoor related games.
- Everyday plush, sub $20, is performing well, delivering terrific growth. Beanie Boos, for example, are doing very well.
- Everyday stationery is doing well – pads, pens, pencils, rulers, staplers, folders … as people work and learn more in the home.
- Some fishing outlets have reported growth in sales of fishing gear.
- Gift shops, jewellers and homewares businesses have reported significant declines.
- Online, as mould expect, is surging. This is including click and collect / curbside pickup.
We have seen several retailers switch to cashless in the last few days. None is reporting customer pushback.
The retailers who have made significant front of store moves to serve the new needs and interests of shoppers are reporting good responses. Games and jigsaws are a good example of this.
Some retailers are having success bagging up packs and offering these as a bundle to shoppers. They make the shop faster and even facilitate curbside pickup or home drop-off.
With nursing homes all but closed to visitors, some retailers are having success delivering care packages for loved-ones who cannot visit.
These are all opportunities.
Looking back in our own software business, we have received a bunch of orders for new websites as retailers make this move. We have redirected resourced to deliver these quickly, efficiently. There is no doubt that being able to sell online has come into its own through this situation.
The other thing we are noticing is that plenty of retailers are taking the opportunity to work on their business. This is keeping our sales people busy, demonstrating our software online and bringing on new customers.
What are we seeing in retail in retail in this COVID-19 world?
The video conferences I have been hosting with newsXpress members and Tower Systems customers have revealed some interesting and, hopefully, useful data. We are hosting these conferences daily.
Most regional and rural retailers are either up or in line with 2019 trading whereas most city retailers are down with shopping centre retailers down the most. On a video call late Thursday, of the 25 businesses, 16 were regional and rural across five states and all reported solid trade.
I have heard regional and rural retailers reporting that the better conditions are due to people with holiday homes or hobby farms and the like relocating to work from these during this work from home window.
There is also evidence of city people moving in with country located relatives.
In city high street situations there is a slight decline with offices emptying out. The shopping centres are in the most challenging situation with declines of 40% and more now common.
In the regional and rural locations stationery is selling well as are colouring books, especially adult colouring.
Across the board, popular items include jigsaws, games, crossword puzzles, magazines, basic stationery and everyday value plush.
We have been promoting send a hug to pitch cards with modest success.
Thursday, newsXpress kicked off an online brighten the room / send a hug Beanie Boo promotion offering 25% off and free shipping triggered at $50. This has driven a terrific boost in online purchases.
I think it is prudent that there are no rep visits to stores at all. It is best to keep shops for shoppers. Cash is king. I can’t see many orders being placed unless for items that will sell well in the short term. rep visits right now are a distraction.
Likewise, I think card companies need to reconsider merchandiser visits.
Retailers are not thinking beyond COVID-19. I think all bets are off for traditional promotions. Take Mother’s Day, for example, plenty of retailers have said they will not bring in additional gift stock for this and that they have cancelled later in the year seasonal orders.
Operating costs. We have had success helping some newsXpress stores to reduce rent. The most successful is a regional NSW store where their landlord has agreed a 50% reduction for at least 6 months. This was achieved using a template we developed a week ago for newsXpress members.
Urgent proposal to Tabcorp
Here is a proposal I put to Tabcorp early this morning following Powerball jack potting to $80M last night:
I write on behalf of newsXpress members as well as the 1,700 newsagent retailers using the Tower Systems POS software.
We are concerned that the $80M Powerball jackpot will prove to be challenging for retailers impacted by restrictions such as no gatherings of more than 100 people, nursing home access in or out, offices emptying as people work from home and entertainment precincts that are shut down. We also expect sales will be a challenge in shopping centres where traffic is down significantly.
We propose urgent, and by urgent we mean today, consideration of:
- Relaxing your rules and allowing retailers to pre-print tickets so they can be taken and sold offsite, such as in a nursing home or at the front of the shop to people who do not want to enter the shop. This relaxation of rules could be limited to 7 days to mitigate any concerns within the company about abuse.
- Releasing to Tower Systems and any other channel connected software company your API along with approval to develop an online sales ability for local stores to sell lottery tickets to regular / local shoppers. We anticipate that Tabcorp has an API for securely accessing the vending of tickets.
While this may challenge your OzLotteries relationship, as a shareholder inn that company I expect Tabcorp could prevail.
Should you release the API and permit existing Tabcorp franchisees to sell online, we would fast track this development for retailers for any individual store website. We would also look at a group wide solution for newsXpress members and urgently work on it if it possible.
I am concerned that in locations where traffic is down because of COVID-19, regular shoppers in those stores will try your website or app, establishing the risk of migration of that shopper from in-store to online.
Join in and talk with other retailers about COVID-19 opportunities and challenges
Tower Systems is hosting another open to all online meeting for retailers to discuss matters relating to COVID-19. All retailers are welcome to participate.
Time: Mar 20, 2020 10:00 AM Canberra, Melbourne, Sydney
Join Zoom Meeting
https://zoom.us/j/911896341?pwd=aWhiT2J6Wmp0bWd3ZEpyZFNQQlRVdz09
Meeting ID: 911 896 341 Password: 393145
Click here to see a video of the meeting from yesterday. This is the fifth online meeting with retailers already this week. Each meeting is different. From what people say afterwards, the most significant takeaway is comfort from talking about a shared experience. None of the sessions have a sales element.
GNS update on COVID-19
Here is a statement from GNS regarding COVID-19:
Dear Customers,
I wanted to take the time to write and let you know where GNS is at given the rapidly evolving COVID-19 situation and how we are looking after our people and you, our customers.
GNS remains open for business, and both product supply and deliveries are running smoothly. However we are taking extra precautions in order to help protect our team, our customers and the wider Australian community.
Changes to warehouse operations
One of the initiatives we are implementing is the temporary suspension of the ability for customers to pick up goods from our warehouses. We’ve done this to protect our customers and warehouse team and to help ensure that we can continue to offer uninterrupted delivery to all of our customers across the country.
Pick-up orders received prior to 2pm today will be available for pickup tomorrow, but must be collected by close of business tomorrow.
New pick-up orders thereafter will no longer be possible until further notice, and any orders placed as such will be treated as a delivery order.
Suspension of open days and in-warehouse shopping
For similar reasons, we have also suspended all GNS customer open days and the ability to shop/browse in-warehouse, effective immediately. We hope to be able to resume these in the future, as the health situation allows.
Changes to sales team call cycles
Our field sales team will now be working remotely rather than making face-to-face calls on the road, moving to primarily telephone and email contact with customers. Your usual state customer service team, account manager and state GM will all be available by phone, email and video conference to support you as needed.
Update on high demand categories
We have experienced unprecedented demand for hygiene-related products and are endeavouring to source product from suppliers to meet this demand and fulfill existing backorders. Under our terms and conditions backorders are firm so, please, if you no longer require items on backorder please let us know as soon as possible.
We’ll keep you updated with any major changes if and when they occur, but in the meantime, thank you for your continued support during these difficult times.
Another online meeting for retailers to discuss COVID-19
Tower Systems is hosting another open to all online meeting for retailers to discuss matters relating to COVID-19. All retailers are welcome to participate.
Time: Mar 20, 2020 10:00 AM Canberra, Melbourne, Sydney
Join Zoom Meeting
https://zoom.us/j/911896341?pwd=aWhiT2J6Wmp0bWd3ZEpyZFNQQlRVdz09
Meeting ID: 911 896 341 Password: 393145
Click here to see a video of the meeting from yesterday. This is the fifth online meeting with retailers already this week. Each meeting is different. From what people say afterwards, the most significant takeaway is comfort from talking about a shared experience. None of the sessions have a sales element.
US presidential hopeful speaks in terms small business retailers appreciate
Sadly, Andrew Yang was knocked out of the US presidential race in the democratic party primaries weeks ago. I say sadly because in my opinion, yang is the type of leader the world needs. he is smart, engaged, inspiring and tech. savvy. Here is a tweet from yang yesterday about support for small business in these challenging days of COVID-19.
ALNA lobbies Tabcorp on behalf of lottery retailers on COVID-19
ALNA CEO Ben Kearney sent out this newsflash this afternoon:
Australian Lottery and Newsagents Association (ALNA) calls on Tabcorp to take decisive steps to protect and support their retailers in navigating the COVID-19 pandemic
As I am sure our members will agree, these are unprecedented and very challenging times and the adverse effects of the COVID-19 pandemic are being felt in every aspect of our lives and critically in the retail network.Above all else we are encouraging our members to please stay calm, as your teams, suppliers and customers will all appreciate this as we are all working hard to navigate the same challenges.
As you would be aware the Federal and State Governments are taking extraordinary steps to stay ahead of the curve with this pandemic and many large businesses are stepping up to do their share of the heavy lifting. Simple measures like ensuring continuity of wages or sick leave for casual employees that may need to self-isolate are helping. Big business has much greater capacity to absorb these shocks than small business operators do and Tabcorp is in a strong position to help.
ALNA is already working with government on ways to help retailers through the crisis and of course in recovery on the other side. This is a great opportunity for ALNA and Tabcorp to work together on this issue with government, as they (the issuers of licences) are significant stakeholders and will ultimately feel the shocks to the retail network over time with a loss of tax revenue, etc.
The fear and panic this pandemic have caused is unparalleled and Tabcorp’s retailers are not immune.
ALNA is making available as much information and support to members during these uncertain and extraordinary times.
As this crisis unfolds ALNA is fielding lots of calls from genuinely concerned members who are already feeling the impacts and are asking if Tabcorp has a plan to support and protect their retail network.
Retailers concerns are wide ranging and start with smaller more immediate concerns i.e. what will happen if the shopping centre closes and I am left with a large amount of unsold syndicate shares, to bigger concerns around what will happen if the shopping centre is forced to close and I have no income for several weeks, or on high streets if players stay home and self-isolate.
The biggest concern of many retailers is the potential for a rapid transfer or dislocation of retail sales over to online as the crisis worsens and more self-isolation measures are adopted or imposed. The new remuneration/omni-channel model does include retailers in omni-channel sales and revenue, but it is not geared to fairly support retailers if an unprecedented and rapid dislocation occurs like this and retailers are left with no mechanisms to sell lottery products to regular customers.
Retailers already report customers are opting to stay at home to avoid the risk of infection. This will potentially be catastrophic for retailers if this escalates through fear or by additional government restrictions on public gatherings and self-isolation, etc. As Tabcorp and many other employers are encouraging and facilitating staff to work from home where possible. This will add to the reduction in retail traffic our members are already reporting.
As you know the new remuneration model has a significant portion of revenue contingent on some performance and compliance outcomes and this is unfortunately adding to the uncertainty and anxiety about cashflow for retailers which is so important to their livelihood at this difficult time. Small business ‘lives and dies’ on cashflow. The failure of cashflow is the single biggest cause of small business closure and consequent loss of employment.
Yesterday, Australian Lottery and Newsagents Association (ALNA) has written to Tabcorp’s Managing Director and called on them to take decisive steps to protect and support their retailers.
ALNA has recommended the following practical measures that will deliver immediate and direct support to their retailers, but importantly they will provide surety and would clearly demonstrate Tabcorp’s support for their retail network in this incredibly challenging and unique time. These will relieve some of the stress and concern being felt by retailers and demonstrate that the whole business is working to resiliently move through this together. They would set a great precedent too for other franchise systems in Australia to follow.
Suspend scoring of the Omni-channel Program for this cycle – immediately (for this Cycle 02/03/2020 – 28/06/2020) suspend scoring the omni-channel program requirements and rate all retailers Green for the Cycle. This will guarantee the commissions from the remaining or available sales are not further eroded and immediately relieve heightened anxiety of retailers.
Support Retailers Revenue – in the event a rapid retail sales decline, business interruption (i.e. shopping centre closures), or the effects of any other forced social distancing measures imposed or being felt in centres and high streets occurs, or where customers simply disengage completely due to illness, Tabcorp should consider temporarily removing ongoing franchise and terminal fees etc. and guarantee retailer’s revenue/commissions for any period the retailers are unable to trade or feel the disproportionate effects of this crisis. This would provide surety and help retailers to maintain quality well trained staff who will be so critical in the rebound phase.
Increase Share of Online/Digital Sales – if there is a rapid and en masse transfer or dislocation of retail sales to online due to mass self-isolations, for Tabcorp to implement temporary measures or mechanisms to re-allocate revenue back to retailers to more fairly share digital revenue during this period which will provide critical and direct financial support to retailers.
Furthermore, ALNA has signalled our desire to work together on what plans or strategies can be prepared now for the retail network when the crisis has passed, and we move into a recovery phase. What marketing, promotional or other initiatives can we plan now for implementation post the virus to help drive customers back into retail.Importantly, as part of the recovery, ALNA believes we need to consider any permanent market changes that occur as a results of this crisis i.e. if the transfer or dislocation of retail sales to online is sustained past the crisis, the omni-channel model will need to be reviewed and transformed to cater for this new trading environment and to ensure retailers are fairly considered.
We will keep members updated on constructive dialogue and solutions.
Terrific newspaper subscriber email from Nine Entertainment Publishing
This is a terrific email to subscribers for The Age and other Nine titles from James Chessell yesterday.
Dear Mark,
Our newsrooms are used to fast-developing stories but the coronavirus pandemic is without precedent. Since we first reported on the outbreak of a new virus in the Chinese city of Wuhan in January, the coronavirus has spread across the world infecting more than 180,000 people, paralysing countries, and upending global financial markets.
Misinformation during this time can spread as quickly as the virus itself. Our newsrooms are committed to reporting the facts about COVID-19 calmly and explaining what the outbreak means for our economy, businesses, schools, sports, culture, households and daily lives. We will do so without straying into sensationalism. It is imperative that our community is prepared and informed as we face this challenge together. Our reporters on the ground in Australia and overseas take this responsibility seriously and are working hard to fulfil it.
We have made our daily live coverage of the pandemic free to all readers given its critical health and community information. It’s thanks to our subscribers that we’re able to provide this service to the wider community. Subscribers power our newsrooms and access to a trusted source of news is more important now than it has ever been.
The wider coverage includes:
Federal and state political bureaus led by David Crowe, Rob Harris and Peter Hartcher pursuing and examining the government’s response to the serious health and economic challenges ahead;
Foreign correspondents filing from Europe, the United States and Asia to provide a global insight, including Bevan Shields’ excellent piece about the ‘herd immunity’ debate in the UK;
Expert business reporters and columnists analysing the impact on jobs, the economy and business including Stephen Bartholomeusz’s must-read on the myriad forces ending the longest bull market in history;
Opinion writers including Jacqueline Maley, Chris Uhlmann, Ross Gittins, Sean Kelly, Shaun Carney and Julia Baird, who wrote eloquently about the importance of hope recently, providing the best range of measured analysis of events for readers who don’t like to be told what to think, and;
Science and health reporters giving regular updates on the nature of the virus, vaccine developments, and personal health advice. Our journalists abide by a set of reporting guidelines when writing about medical research, which you can read here.
Most importantly, we will tell you what it all means for you and your family.
Each morning we publish a Morning Edition newsletter that provides a summary of the day’s most important stories. You can sign up here to have it delivered to your inbox each morning.
We first published our comprehensive explainer on the virus on January 21. It has had more than 2500 updates since and continues to be constantly revised. It serves as an excellent primer on the basic questions we all want to know including how worried we should be. Our award-winning explainer team has also written about what coronavirus does to the body, the rules of self-isolation and the origins of COVID-19.
We know you will have many more questions and we are keen to hear them. You can send them to our newsdesk via newsletters@theage.com.au
As an increasing number of us become isolated in our homes, we want to keep readers connected not just to the news but to each other and will be pursuing ways we can keep our communities in touch online through our comment feeds and social media groups.
We know too, that our readers will need a break from an overwhelming news cycle and we will be highlighting content that can help you pass the time with positivity such as our Good Weekend long reads, quizzes, Good Food recipes (freezer-friendly favourites and eight simple ways to keep your immune system in top shape may come in handy) and ‘good news’ stories. This month, we are also launching a series of new podcasts with topics ranging from television to AFL and crime.
The safety of our staff is paramount and we are taking as many measures as we can to do our bit to minimise the spread of the virus throughout the community. But we are also very conscious of our duty to report the news no matter what the circumstances.
I want to thank you, as a subscriber, for supporting journalism which in the coming days will be vital. We hope your family stays healthy and safe.
Alex Lavelle
James Chessell,
Executive Editor
Video conference for retailers today about COVID-19
newsXpress has hosted 5 online member meetings about COVID-19. My software company, Tower Systems, has hosted 2 as well. It is hosting another today @ 11 am Melbourne time,. Anyone is welcome to participate.
These sessions are helpful for retailers sharing with other retailers local situations, realising that you are not alone. They are also supporting and a wellspring if ideas.
Here are the details – access is free:
Topic: Retailer COVID-19
Time: Mar 18, 2020 11:00 AM Melbourne time.
Join Zoom Meeting
https://zoom.us/j/570954886?pwd=dlJCQjJZTEl4NC84bmVob1JUdnJHUT09
Meeting ID: 570 954 886
Password: 230242
Business disruption insurance will not cover COVID-19 caused disruption
Several insurance brokers and two insurance companies have advised that business disruption insurance cover will not cover a business for COVID-19 related disruption.
If you are not sure, call your policy issuer.
This matters so that you factor the lack of insurance into your cashflow planning for the next few months.
Alternative for newsagents on the imminent closure of Touch Networks
My newsagency software company, Tower Systems, last week announced to customers the imminent integration from within the newsagency POS software with epay, bring to 1,700+ newsagency counters access to the broad range of epay voucher products.
I’ve invested $50,000 to fund this work so that it is delivered at no cost to newsagents using current Tower software. I mention this to be transparent that this work comes at a cost and that that cost is not being passed on to newsagents.
The reaction from newsagents to the news of an alternative to Touch has been terrific, some good news in what has been a challenging year for the channel and retail more generally so far.
Tower will keep its customers up to date on the launch of epay access through the regular weekly email communication.
COVID-19 is driving down retail sales for many small business retailers
Talking to retailers from several different channels, there is no doubt that COVID-19 is impacting retail shopper traffic and revenue. Traffic is down. Revenue is down.
None of the retailers I have spoken with are from channels with sought after food and household goods lines. They are all from businesses serving discretionary needs.
I think the significant decline in retail traffic and revenue is due to two main causes: anxiety in the community about future income and spending of available funds stocking up on essentials.
Looking at the forecast trajectory of COVID-19 and regardless of what governments decide about retail being open, this is the new normal for the next six months at least.
Several newsagents I spoke with said revenue was down 30% Thursday – Saturday last week compared to what is usual for this time of the year. Retailers outside our channel share similar numbers. Yes, 30%. Plot that out in your cashflow projection for six months.
While the possibility for forced closure is most likely in the near future, there is a more present challenge today, the challenge of sales revenue taking a serious and sustained dive.
The sales decline is so great that the affected businesses have to respond, unless they have spare capital to fund being open usual hours with usual overheads.
Walmart in the US overnight announced a significant scale back to their hours. plenty 24 hour stores will close overnight. They say to re-stock. I this it is to also contain costs.
If your revenue has significantly dropped in recent days and if you don’t have a deep well of capital from which to draw to tide you through, consider:
- Reducing opening hours and / or cutting labour cost (rostered hours).
- Reviewing all inventory forward orders.
- Being transparent with local shoppers about the challenge.
- Pitching bringing forward purchases for Easter and Mother’s Day.
- Encouraging forward purchases of birthday cards and gifts.
- Stocking up on crossword titles.
There is no shame in the sales decline.
In my own case, we will decide today our own next steps. The first move is likely to be a reduction in hours. Nothing major, but a move nevertheless. Our forward orders are prudent. And, we have been actively promoting bringing forward purchases for several weeks.
We have sought information from Westfield on their plan but have heard nothing.
What is impacting the whole community and retail is unprecedented. No one knows for sure what retailers should do. However, we do know that doing something is critical.
UPDATE: 1pm four newsagents have contacted me reporting between 30% and 40% reduction in revenue for the week to Sunday March 15, 2020 compared to the same week a year earlier.
Australian Geographic magazine for the counter
This issue of Australian Geographic magazine is perfect for pitching at the counter. Shoppers will buy it for themselves and as a perfect gift for someone overseas. The koala is adorable, the image timely.
That’s my recommendation – place this issue of Australian Geographic at the counter, and see it sell.
Other retailers won’t take this initiative.
If you plan to go cashless because of COVID-19
newsXpress Toorak was on A Current Affair last night because of their decision to go cashless from Monday for health and safety reasons.
If you decide to go cashless in response to COVID-19, I suggest you remove all surcharges and that you fully explain your reasons. Maybe something along the lines of…
We are going cashless for the health and safety of our customers and employees.
We appreciate this may be challenging for some and we apologise for that. We will try and accomodate the needs of those affected.
We are not playing into a conspiracy to remove cash from society. Rather, our health and your health are what matter here.
Be safe everyone and thank you for supporting our local business.
Unfortunately, shrill reporting of the story on social media has lead to some nasty comments being made not only about the business but about newsagencies more broadly.
My advice is to not go completely cashless.Always have a way of serving for cash. But above all, get your messaging right. Shows like ACA are there to encourage and feed trolls.
Bright Easter for front of store
We have had our easter pitch up and at front of store for 10 days and it has been working a treat, drawing shoppers to the business from the busy car park to main centre mall thoroughfare in which we are situated.
It’s the plush items that are attracting shoppers. We watch them drawn to the shop, picking up items, and being drawn further inside looking at other items.
The display is a key pathway to purchase:
- Notice the display while walking past.
- Walking toward the display.
- Picking up and item or 2.
- Looking beyond the display and into the shop.
We see this pathway work regularly. We actively watch as this engagement is key guidance as to whether a display is working or not.
Easter is a terrific season beyond the significance for those with with Christian beliefs. It is a family tradition season for many and that is where it works well for us.
I didn’t create the display in the photo. I saw it for the first time a week ago when visiting the shop. It is terrific. I am grateful to those who put this together.
Professional analysis on the likely impact of COVID-19 in retail businesses
A supplier representative I trust shared with me a comprehensive independent 33-page report from a US research business on the likely impact of COVID-19 yesterday.
The report looks at the likely impact from the perspective of US retailers and their suppliers including manufacturers and the supply chain. It seeks to inform US business leaders so that they may make appropriate plans suitably in advance. There is expectation that much of what the report discusses will apply to Australia.
While I cannot share the full report, here is some key information that I hope is useful. My own comments are in square brackets.
- Out of stocks are likely across high demand categories. [Australia has been ahead of the curve on this – toilet paper, pasta, cleaning products, rice.]
- Cocoon-stocking will reflect household makeup, with indulgent items, such as DVDs, confections, salty snacks, alcohol sales increasing; however, holiday shopping may take a hit. [Hence advice weeks ago about promoting games, jigsaws and similar.]
- Food delivery, Click & Collect, online shopping and home delivery will increase as consumers avoid going to areas where there are large gatherings.
- In-home entertainment will flourish, and some marketers should re-consider their media spending (e.g., less out of home, fliers, etc.)
- Out-of-home food consumption is likely to take a big hit as travel comes to halt. More people will be working from home as virus spreads across the U.S. [We see stories daily ion restaurant closures.]
- In-home food and beverage will increase significantly, resulting in both increased consumption and pantry stocking.
- Stockable items continue to be popular (besides obvious ones like wipes), e.g., shelf-stable and frozen food items, sports drinks, water, toilet paper, etc.
- Some manufacturers can potentially spend less in terms of advertising and trade if they have virus tailwinds in their back, opportunistically driving some savings.
- Preventive healthcare products, such as vitamin C, are trending higher than symptomatic products.
newsXpress has been sharing this information like this and even more detailed on COVID-19 for weeks. It shared it’s first strategic advice in terms of strategic product placement in store and out of store marketing relating to COVID-19 in late January. I mention this as a reminder that proactive marketing groups can play a key role in providing members with a competitive advantage.
Not a retail apocalypse: Kikki K has been headed for trouble for years
Back when it launched, Kikki K was innovative. Built on the back of carefully selected products from quality brands, the business was known for curated stationery related gifts. A year or so later, the brands were replaced with house brand products. A beautifully designed and thoughtfully curated range continued at a premium price but direct sourced by the company.
In the years since, Kikki K has played the same game – beautifully designed and thoughtfully curated products direct sourced to maximise margin.
Once mass retailers entered this space, K Mart and Typo in Australia and similar overseas, Kikki K needed to change, to differentiate from what had become a crowded marketplace with downward pressure on margins.
Kikki K didn’t change direction. On a retail innovation tour 18 months ago some of us were talking about Kikki K and the store we had just seen, commenting that unless the company reinvented itself it would not last. Product designs had a sameness look and feel. The pricing model remained expensive with a value offer for volume. Mass retailers nearby could beat them easily.
The other challenge for Kikki K was it was built on a kind of influencer model in an era that pre dates influencers. The issue with influencers is they have a limited shelf life before another influencer gains attention.
While current retail challenges may have sped up the bringing in of the administrators, it is not the cause. The case rests with those in control of the direction of the business over the last 10 years. They did not innovate, they did not act for the company to offer a unique value proposition. Immediately the Kikki K offer was joined by mass retailers with excellent design departments and better direct sourcing the company needed to move. It did not.
It frustrates me that news outlets will point to the appointment of administrators as another example of their often talked about retail apocalypse. The Kikki K story is not that. If only news outlets would do better research.
If Kikki K stores close there is good opportunity for innovative newsagency businesses nearby. Their closure could be good news for our channel.
My advice to newsagents is to not feed off the retail apocalypse nonsense in plenty of news stories out there.