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

Author: Mark Fletcher

Milkrun: a business to watch

Milkrun is an Aussie tech / retail startup that is worth watching. What they are doin g is what newsagents could have done back when they were transitioning from being local distributors. But, to be fair, the tech has come into its own and Covid … making Milkrun’s timing for now just right I suspect.

This 7 news story has details:

I mention it because of the comment about dark stores / dark retail – this is a retail situation not open to the public. Dark retail is something I have advocated newsagents have at the back of their shop for an online business, a side-hustle that can use shop infrastructure.

So while it’s too late to get into this Milkrun type of business offering local deliveries, there are aspects of what they have done and are doing that can inspire newsagents, like dark retail.

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retail

Local newsagents impacted by floods

The floods in Queensland and New South Wales are hitting hard with homes and shops under water.

The extent of the impact for many, especially those in business, will not be clear until they are permitted to return to their shops. All they can do for now is look on at the footage shot by drones.

Some already know from what they have seen that their shops will have to be gutted. Flooding like this does extraordinary damage, leaving little to be salvaged.

I know there are plenty of us in the channel, newsagents and suppliers alike, thinking of our colleagues facing tough times right now.

We have been watching this unfold since late last week. It is disappointing that it was not until today that some practical federal assistance was announced.

Hopefully, practical assistance will be more forthcoming than the promised bushfire relief funds announced two years ago and not delivered.

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Social responsibility

The window of the shop

For habit based shoppers, what you put in your front window will not be noticed by them, as they are more often than not destination shopping when them come to your shop.

This is why I suggest to retailers that they not pitch destination products in the front window or on the lease line. It doesn’t;t make sense to me to show off what you are known for.

I like to use a front window or a lease line display to pitch what I am not known for, to get people to notice or turn their head at least, and, maybe come in to check us out.

The more we can play against shopper expectations the better I think for the expectations attached to newsagency shops are rooted in history.

This display is from one of my shops from yesterday. It speaks to this desire to pitch what we are not known by most for. It speaks to a freshness and a warmth if you will outside of what may be associated with shopper assumptions re a newsagency.

The mix of colours, textures, product categories and gifting occasions pitches a diversity that we think will help us attract people who might otherwise have passed the shop by. We are really happy with the mix. Quite proud actually.

This approach to outside traditional newsagency category pitching at the front of the business is easier for us given that we don’t have lottery products. While we are asked daily (ugh!) by people who tend to not look around themselves, we are getting more people asking about gifts they’d like to give.

This display at the front of the shop will remain in this form for no more than two weeks. Then, it will start to evolve. depending on new sales and new inventory availability it may be completely replaced at that time.

Let me leave you with some sales benchmark guidance. Plenty of newsagents are doing gift revenue of two and three times their card revenue, some even more. Those doing less than their card revenue have excellent opportunity for growth and that is the key point I’d make as there are many Newsagency businesses with that opportunity on the table.

Oh, and one final point. To show what I mean by being on the lease line, look at this image as through it you can see the Coles supermarket that is opposite us.

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Management tip

Major lottery news out of Victoria

Tabcorp and Lottoland have been given 20 year licences to sell keno online. Yes, that Lottoland!

Here is the government press release:

23rd Feb 2022

Tabcorp And Lottoland Awarded Victoria’s Keno Licences

Minister for Consumer Affairs, Gaming and Liquor Regulation Melissa Horne today announced Victoria’s Keno licences have been granted to Tabcorp and Lottoland after a competitive tender process.

The two licensees will be able to provide Keno online for the first time, as well as through traditional retail outlets, backed by harm minimisation and consumer protection measures.

The two-licence model provides consumers with a greater choice and is better for business. It allows distributor venues to benefit from competition and innovation as it removes a one licensee monopoly on the market.

Tabcorp and Lottoland will both be authorised to conduct and distribute the game of Keno in eligible hotels, clubs, wagering outlets and electronically throughout Victoria.

Stronger harm minimisation and consumer protection measures will also be introduced to help promote responsible gambling for those who choose to play Keno in Victoria.

These measures come after the Government conducted a robust review into the future of Keno in Victoria, consulting with industry, community and government stakeholders.

Under the changes, the Minister for Consumer Affairs, Gaming and Liquor Regulation can issue harm minimisation directions to both Victorian and interstate Keno game providers when providing Keno to people in Victoria.

The directions will focus on key areas such as incentives, direct marketing, account closure, deposit limits, activity statements, responsible gambling messaging and maximum draw frequency.

Harm minimisation directions will be based on the National Consumer Protection Framework (NCPF) for online wagering, with additional elements to support online Keno specifically.

Applications for the new licences were assessed against a number of criteria, including corporate and individual probity, as well as the economic benefits to the state.

The 20-year licence will commence on 15 April 2022 after the current licence, awarded to Tabcorp in 2012, expires.

Quotes attributable to Minister for Consumer Affairs, Gaming and Liquor Regulation Melissa Horne

“The industry has changed significantly since 2012, with new technologies and new online market entrants, so we have updated the Keno licence to allow for a more modern approach.”

“These changes will benefit businesses, while also ensuring stronger harm minimisation and consumer protection measures are in place so those who play Keno in Victoria can gamble responsibly.”

Hmm, I’m not sure how the changes benefit current lottery retailers.

Lottery Daily has their take on this:

Tabcorp and Lottoland have been awarded dual 20-year licences to offer Keno games in the Australian state of Victoria.

The new licences, which take effect from 15 April 2022 and run to 2042, are a return to the pre-2012 structure of two authorised operators in the Australian state, before Tabcorp’s 10-year exclusivity.

While Tabcorp’s current licence only covers retail, the new agreement also stretches to cover digital services after the company paid an up-front fee of $25m.

Sue van der Merwe, Managing Director of Lotteries & Keno at Tabcorp, commented: “Tabcorp is pleased to continue its partnership with the Victorian Government, with the longer term and expanded channel flexibility offered under this licence.

“The new structure will allow us to continue offering Victorian players a world class Keno product and responsibly grow the game further, backed by our extensive retail and brand presence and the expertise gained from our existing Keno online business.”

Lottoland also shared its enthusiasm over the deal as it announced its online platform KenoGo is gearing up for launch.

Nigel Birrell, CEO of Lottoland, added: “We are thrilled to have been granted a Keno licence by the Victoria State Government and look forward to launching KenoGo in 2022.

“I would like to personally thank the Minister for Gaming and Liquor Regulation, Melissa Horne, and the Victorian State Government for awarding the first dual licence in Australia.

“Most importantly, this licence means that consumers in Victoria will be able to enjoy Keno online on their smartphone or computer for the first time ever, with new gaming experiences and greater choice through Lottoland.”

The move to award dual licences follows the Victorian government’s Keno Licence Review and subsequent invitation to apply for a Keno licence process.

My view is there is no upside trend for over the counter lo9ttery purchases. yes, I understand big jackpots, l like tonight’s $120M Powerball will spike traffic, but not as much as they used to … because … online.

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Lotteries

The failure of Are Direct to get magazines to retail newsagents on time costs newsagents money

It’s Thursday morning. We have had our two magazine arrival staff members at the shop since 6am, waiting. Then, an hour and a half later, we get notified.

For years, Gotch managed pitched excuses, reasons why magazine distribution was challenges. Then, it was Ovato making similar pitches – the name change achieved nothing. Now, under new owners, well, here we are … waiting for magazines.

It’s a one-way relationship, and here’s why I say that. Their starting position when a newsagent reports short supply is that they do not believe you. It can take 3 ro 4 contacts to progress a claim. But, sometimes, you’re not successful,. even though know the magazines were not delivered.

One of my shops, one I bought just before Christmas 2021, does $380,000 a year in magazine sales. The distribution mess in Melbourne overseen by Are Direct is commercially harmful. Publishers should be screaming at them.

Footnote: I appreciate not everyone is impacted by this. Right now, it appears to be Melbourne focussed.

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magazine distribution

Extraordinary sales growth for Amazon Australia

57% year on year growth achieved by Amazon.

Amazon has become one of the leading online marketplace in Australia in just four short years, zooming ahead of rivals such as Catch and Kogan during the COVID-19 lockdowns.

Amazon’s sales revenue hit A$1.75 billion in 2021, due to its “the everything store” status, coupled with a hefty streaming offering through Amazon Prime. In 2020, revenue more than doubled to reach A$1.12 billion.

Amazon.com.au, the online store portion of Amazon’s local business, generated sales of $883 million in 2021, a huge leap from 2020’s $517 million.

Amazon Prime memberships accounted for $155 million, and is a fast-growing arm of the local Amazon enterprise. In 2019, the nascent streaming service made just $35.4 million in Australia.

“Revenue from related parties”, which accounts for royalties from Aussie shoppers buying via international arms of the Amazon store, reached $471 million, up from $371 million.

Now, if only they paid a decent amount of tax.

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Competition

AGHA Sydney gift fair “a waste of time”

Several retailers I have spoken with told me the Sydney AGHA gift fair held this past weekend was a waste of time. It appeared challenged to me when I realised that a chunk of suppliers in the fair directory were not attending.

For interstate travellers, retailers and suppliers, I suspect there is plenty of frustration at the costs involved.

More attention needs to be paid to transparency around faders as we come out of the Covid lockdowns. If there are more experiences like AGHA retailers and suppliers will be wary and that benefits no one.

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retail

Remembering the comic magazine segment

Conics were an awesome magazine segment back in the day, a perfect habit based product that brought shoppers back and back. While we still have some comics today, sadly, not enough for what remains a passion for plenty. Check out this as from years ago:

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magazines

Playing outside traditional retail seasons is vital to growth in retail newsagencies

Blue ocean strategy is all about positioning your business in clean and clear waters with less competition. Red ocean is where most are, it’s crowded and bloody.

Major seasons like Valentine’s Day are red ocean. Crowded. Competitive.

At the newsXpress newsagency marketing group business we love creating blue ocean opportunities for our members. Here is a short video from me, which I shot Thursday last week, in which I talk about blue ocean opportunities in 2022 for newsxpress members.

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newsagency marketing

Going out early with Easter is important for newsagents

The Toyworld a couple of doors away from our newsagency has has had cheap $1 and $2 Easter cards on the lease line for several days. I can’t recall them pitching the Easter season two months out before, but here we are.

Thankfully, we had our stock so we could adjust plans and go out early, which we have done, and, yes, people are shopping the season early.

Right now, the focus is on cards. we will add gifts as they arrive, to tell a more complete seasonal story.

The card pitch today for us is all about friends connecting, using Easter as an opportunity to send a greeting or I’m thinking of you message to a friend, using an Easter card.

While Easter is a smaller card season, it is valuable, and growing. We don’t engaged with the $1 and $2 cards as we see that as a mugs game. Price based shoppers are not loyal.

What we are seeing this year, as with every year for Easter quite frankly, is that religious cards sell best early in the season.

We encourage this through gentle social media posts and tactical placement of these cards within the broader Easter card offer. It is not uncommon for this shopper to purchase several religious Easter cards at once. Since we have a good range of general religious cards in-store, we are able to cater to this shopper beyond the Easter season. It’s important that we try and make that connection.

My tip for newsagents: if you have Easter cards and they are not already out, get them out if you have the space. There are other retailers, like Toyworld, in this space and possibly taking sales you might have otherwise got.

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Greeting Cards

Leveraging the loyalty differentiator in the newsagency

Shopper loyalty has become a maze of hoops, often with little real value at the end for shoppers, and retailers. Almost 9 years ago to the day my newsagency software company launched a new approach to loyalty. Yesterday, I shot this short video in which I talk about what continues to be a differentiating approach to loyalty. I know of hundreds of newsagents using this, and hundreds of other retailers.

Sure the video promotes my software company. It also encourages you to look at what you do in the loyalty space and to question whether what you do values shoppers and differentiate your business.

This simple approach to loyalty is easily understood and this helps people engage with it sooner, even those who make a one time only visit to the shop.

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Leadership

Retailers keen for OzLotto changes

The SA Government recently gazetted changes to the state’s Lotteries Act and through that offered.May 11, 2022 as the date from which changes to OzLotto will apply.

7 numbers from 47 are drawn and three supps.

The changes are expected to reinvigorate interest in OZLotto through an increase the jackpot opportunity, which plenty of retailers love.

For retailers reliant of lottery products, the changes are good news.

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Lotteries

Retail advice: you are not your customer

Talking with a newsagent the other day they mentioned their success with a product category they had rejected for several years. That category is now delivering close to $50,000 a year in good margin revenue to the business. Better still, it is attracting a category of shopper not common to their business.

They mentioned it because they heard me say to another retailer you are not your customer.

None of us in retail are our customers yet too often local small business retailers stock their shops with what they like, missing opportunities to give more local shoppers what they like.

Ranging new products is speculative, a risk. But, trying to attract new customers requires this type of risk taking, done carefully.

The key is the data analysis of the performance of what you have taken on, to measure whether it stays or goes. If it is working, the opportunity could be to expand into allied niche areas, to grow the opportunity further.

Accepting that you don’t know what you don’t know can free you to trial products you have rejected in the past and, through that, uncover valuable opportunities for your business.

My advice is to always have a modest inventory and space investment on the shop floor of new products that you would not usually carry. Let them show you if they work or not.

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Management tip

Covid rapid tests available for immediate delivery

Through my work with newsXpress and a national pharmacy group I have been sourcing Covid rapid tests. From the latest shipment, which arrived at the office this morning, there are a few boxes of spare stock.

Each retail pack has 5 tests. Each box has 240 retail packs. The wholesale price of $43.90 per retail pack (plus GST) delivered for 240. That is $10,536.00 for a carton of 240 retail test packs delivered. or $44.90 (plus GST) for 120 delivered, or $5,388.00 per 120 delivered.

The current retail price ranges between $55.00 and $75.00 for these 5-test packs.

The tests are the TGA approved Clungene tests.

If you are interested, please email me direct rapid@towersystems.com.au.

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Social responsibility

How to spot employee theft in a newsagency

Theft is a problem in retail. Too often, it is not discovered until after the event, primarily because of a lack of belief that theft is a problem, particularly theft by employees.

One of the best ways to detect employee theft is to look at your business transactional data. Good POS software not only tracks what is sold, it also tracks what is deleted from sales and entire sales that are cancelled, and it keeps this data in a hidden file, not accessible in the usual reporting way of the software.

In my experience, one out of ten times I have received this secret data for a retailer using my POS software I have found evidence of questionable behaviour. Laying this evidence out with video footage, ideally, and employee rosters, a person of interest emerges, or more depending on the video evidence with a money (in the pocket) shot.

I am not going to share here the incriminating keystrokes but I will say they have been court-tested in cases while providing expert witness for the prosecution.

My advice to newsagents and any retailer is to use the theft detection and mitigation tools in your POS software. learn about them. Use them. But don’t tell others what you are doing.

Some retailers think the best approach to reduce the theft opportunity is to lock everything down, making it very hard for people to steal. The thing is, people who want / need to steal will find a way and the harder you make it for them m in a retail setting the harder it will be for you to detect it.

I am not saying tempt them. rather, don’t lock your POS software down, give people reasonable access, and watch what they do – follow the advice of your POS software company on using the data their software collects for you to see if theft could be a problem min your shop.

Cases of employee theft in a newsagency in which I have been involved have ranged in theft cost from $5,000 to $245,000. In every single instance, using the secret tools I have mentioned here could have detected the theft sooner and reduced the financial an emotional impact on the business and others.

If you have read this far, thank you and well done. Most will not, because theft is not an interesting topic – until they are personally impacted.

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theft

People are more curious of product origins

One consequence of Covid that I am noticing in retail is that shoppers are more curious about product origins. More are interested and ask, and, if there is a choice between locally made and imported, there are enough preferencing locally made to for us to speak to that in buying and marketing.

As a retailers we are more aware ourselves about products that pitch Aussie or an Aussie connection, which may have been made offshore. In these instances, more shoppers notice and comment, as someone did at the Coles checkout I was at the other day, pointing out these made ins China “Aussie” bags.

It is sourcing like this that can bite a retailer. And, rightly so in my opinion. The only Aussie thing about the bags is the use of chant often hears at sports events. Okay, it says they were designed in Australia. There does not seem to be much to the design.

The bags feel like a misstep by Coles to me, but I doubt people will care. They are cheap and at the counter for easy purchase when needed.

This is where local retail businesses can make a difference. Okay, local sourcing of bags means they will be more expensive, but through this we can call out those shipping Aussie cash and jobs offshore. It all depends on what people want.

In local small business retail we want shoppers and we seek this by being different. Sourcing more locally is one way we can speak to our difference. This matters if our businesses are hit up by local charities to support them. This is where the whole sourcing local issue becomes circular. We can only help them if they help us and helping us means helping keep more jobs and Aussie cash locally.

It’s a hard care to make when so many do buy on price. My experience is that there are enough buying based in value, as opposed to price, and they are more loyal to our businesses.

As a result of Covid and challenges in the supply chain, people are more interested in sourcing locally. This is an opportunity for us.

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Social responsibility

Photo background remover tip

Remove BG www.remove.bg is the best tool I have ever used to quickly and easily remove backgrounds from photos.

Before:

After:

And, with a black background:

From the 3 images above you can see the value of a quick tweak of an image, especially if you plan to use it online.

From the taking of the photo through to the final image, it took less than a minute.

We’ve been using this in the newsXpress community for ages along with other graphic design and adjustment tools for better images. remove BG is a must-have in the toolkit. It’s 100% free.

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newsagency marketing

Leveraging the Better Homes and Gardens opportunity

It’s terrific when there is a feature in a magazine of products you have in-store. This is the case with the latest Better Homes and Gardens magazine.

We have the magazine open and placed with the products it showcases, products we usually carry.

What a treat!

And, yes, this is a display in a newsagency. It is placed at thew front of the store so passers-by can see it and, hopefully, enter as a result.

Homewares is one of the best performing categories in newsagencies right now, delivering good year on year growth, good stock turns and good margins. Plus we have access plenty of suppliers in this space.

Footnote: while the publisher may want a display that’s all about their magazine, this display we have created does more for magazine and homewares sales, and that is what matters to us as the retailer.

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Newsagency opportunities