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

Author: Mark Fletcher

A cautionary tale re online advertising

Marketing Today host Alan Hart interviews Kevin Frisch, who was recently the CMO of Wag and before that the head of performance marketing, and CRM for Uber.  In this interview they discuss a Ange of topics related to online advertising and, in particular, fraud occurring with online advertising as experienced by Uber.

It is a stunning expose of a scam that cost Uber millions. In online advertising is interesting to you, I think you will find this interview fascinating.

The discussion at around 15 minutes about how they acquire customers is fascinating as is the realisation about how much money Uber spend on pointless advertising.

Online ad platforms accessed through third parties make fraud as described easier.

In my own businesses we rarely advertise online now. We have never used third party platforms to place ads for us, thankfully.

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Ethics

Advice on back to school shopping for the 2021 school year if you care about your local community and local jobs

Parents, schools and others, if you are shopping for back to school stationery items this year, please shop thoughtfully.

  • Shop locally, from an Australian owned business. P{preferably, from a business in your local community.
  • Support the local businesses local community groups are likely to call on.
  • If you have a choice, choose locally made items.
  • Buy what you need, don’t be tricked by a volume price deal that may see you buy items you will later waste.
  • See price guarantees for what they are – lazy marketing from businesses that don’t put in the hard work.
  • Quality is more important than price.

A price difference may not be what it seems. It could be due to lesser quality, or the supplier not supporting your community groups or the supplier sourcing products made in a cheap labour country, which does not help local Aussie jobs.

Newsagents are usually in the first businesses to be asked by community groups and schools for donations. It is unreasonable to do this unless you help them win business. This is just one reason your shopping local for back to school products matters.

Beware claims of big savings. One major stationery business is currently claiming that parents are saving on average more than 25% by shopping with them. This is a business that makes genuine price comparison difficult because of the volume of house brand product. I know of several newsagents who have price checked for local families and found the difference to be less than 5%.

Back to school is, for sure, an expensive time for families. Saving money is appealing. However, it is critical to be sure that the savings are real and that money you are spending benefits the economy on which you rely.

A small higher price could be for better quality product, local community group support, school support or for supporting local jobs, thereby putting money in the local economy, which helps fund, maybe local jobs on which school parents themselves rely.

Yes, the economy is that circular.

I guess my key message to parents re back to school is to take your time, do your research, understand the bigger picture, beside you know how your decision may impact yourself and those close to you.

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Social responsibility

Suppliers benefiting from being open when usually closed

I know of several family small, niche, gift related wholesalers / makers who opened last week and benefited as a result.

In each case they run a small warehouse out of their own office and are able to pack and ship without a large staff infrastructure.

Them being open and communicating this meant that plenty of retailers ordered top-up stock from them. The retailers may not have done this, or not noticed the opportunity, had more suppliers been open.

One of the lessons from Covid is to be opportunistic, to act deliberately to leverage opportunities you feel may be there. This goes back to what I wrote on December 21 about January plans.

One of my own shops would usually close between Christmas and New Year. This year we opened. The result was well worthwhile. We compete in our high street situation with several other stores selling gifts and cards. They were open. We all had the same idea. I suspect they did as well as us.

January will be different this year. Holiday patterns and arrangements have changed.

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Opportunistic retail

New newsagency sales benchmark study launched

I sent an email to newsagents earlier this morning calling for data for a new newsagency sales benchmark study.

This is an important study as it will provide a glimpse into an important quarter, which is likely to provide an insight into early 2021.

Here is the full text of the call for participation.

Q4 2020 NEWSAGENCY SALES BENCHMARK STUDY.
I am collating data for a new benchmark study, looking at sales October through December 2020 versus 2019.

How to participate.

  1. Please run a Monthly Sales Comparison Report for 01/10/2020 – 31/12/2020 compared to 01/10/2019 – 31/12/2019.
  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.
  6. Email these reports direct to me at mark@towersystems.com.au.
  7. Read the report yourself and see what it shows you about your business.

I will email the results to all participating newsagents and publish the results on theAustralian Newsagency Blog as a service for all newsagents.

I own and run three newsagencies. Over the years I have had three others. I own newsXpress, the newsagency marketing group.

I am grateful that Tower Systems has added 35 newsagents as customers in the last year as customers of our newsagency software,

As I have done rolling smaller dataset studies monthly for the back half of 2020, I think I have an idea of that this bigger study will reveal. But, who knows?!

Oh, and … happy new year!

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Newsagency benchmark

When 2020 began

When 2020 began, we were in the dark about what was coming for us, for all of us. We had our resolutions, plans and hopes. We had our cherished dreams.

We were unprepared for how 2020 would play out.

The hopes and dreams we started the year with were soon forgotten as the pandemic took over the news, our businesses, our home life and our focus.

2020 sure has been a year.

Looking back, we see heartbreaking human loss and economic challenges, which, sadly for too many, continue today.

Looking back, we also see many wonderful achievements.

There are the big pieces like the 1,000s of scientists working together to create vaccines in record time, people and businesses fundamentally changing how they work and politicians, for a moment, setting aside traditional differences to actually do good.

There is the good news of whole communities working together to ensure people remain safe and to get the numbers down.

In small business, where we spend much of our time, we have seen wonderful acts of kindness, extraordinary local shopper support, greater resilience and deeper community connections. It has been a joy to hear stories of locals consciously shopping locally and genuinely being interested in product sourcing.

We have all learnt so much about ourselves this year, what we can do, the differences we can make, new friends we can serve.

As the sun sets on 2020, we are grateful for this year, for the opportunity to be part of it and to be here, at the end, stronger and grateful for what 2021 will offer.

Happy New Year. May your 2021 be healthy, happy and filled with gratitude.

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Social responsibility

Tip: don’t discount calendars

Calendar Club has done its best to teach Australians that calendars need to be discount to sell. While their business has been successful, grabbing plenty of calendar revenue in shopping centres, they have not ‘educated’ everyone that the only way to sell calendars is to discount them.

We don’t discount calendars and can get full price through to early in the second half of the year.

The key is to purchase so that you sell out before then. Also, the more niche the title, the less price pressure.

So, we are not discounting calendars and so far this year we are up more than 50% on last year’s good base.

Calendars remain a strong category, nicely complimentary to diaries, which are strong, too.

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Calendars

Excellent newspaper sales in December in the newsagency

In our high street newsagency we are tracking excellent year on year results for newspapers with dailies up 12% and foreign language newspapers up 25% – based on unit sales.

I’d be interested to hear how newspapers have gone for others through December.

I expect high street, regional and rural businesses will have similar results to the above. I think the Covid bump will be here for some time, hopefully long term. And, by bump, I mean – more people shopping any from malls and more people buying papers, especially foreign language papers.

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Newspapers

A very different Boxing Day

If the small dataset I have seen plays out nationally, Boxing Day 2020 will be down on 2019 in over the counter purchases while online will be well up, resulting is numbers close to last year.

Of course, the results vary by location. In Victoria, for example, shopping centre traffic was down Boxing Day 2020.

The strength of online on Boxing Day, even for sites without deals, speaks to a strong future for trading online.

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Newsagency management

Commercial tenancy relief scheme for Victorian small business retailers

The Victorian Government is facilitating more proactive help for Covid impacted small business retailers through its Commercial Tenancy Relief Scheme.

Critically, small business retailers can apply for free mediation with the Victorian Small Business Commissioner to resolve a rent dispute. This could be a good way to bring forward the resolution of any dispute re rent relief arrangements.

I know of several retailers who could benefit from this.

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Newsagency management

All set for Boxing Day

It’s all set to start, the annual Boxing Day Sale. In our shopping centre locations, this is a key sale event for the year. It will be interesting to see how it plays out this year.

We have old stock to move and plenty off stock brought in for the event. Christmas has been taken down and the shop reset for a sale feel.

If you are running a Boxing Day Sale this year, happy trading!

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Newsagency management

Magazine sales good in newsagencies for Christmas

Magazines are selling well in newsagencies in recent weeks. Home and living, crossword, crafts, special interest and food magazines are all doing well.

Comparing 2020 to 2019 and then 2019 to 2018 for the category for a few newsagencies, in this dataset, 2020 is performing very well. The average unit sales growth I am seeing is 7%.

Of course, the growth could be at the cost of other retail outlets, such as those in shopping centres, or even outside the newsagency channel. The growth could actually be net growth for magazines overall, which would be appreciated by retailers and publishers.

Talking with some retailers, there is anecdotal evidence of magazines being bought as Christmas gifts. While this is not unusual, it does feel, to some, that it is more the case this year than in the past.

I hope that what I am seeing from the small dataset is a trend for the channel more widely. It would be encouraging to see magazines end 2020 on a high note after the wild ride that 2020 has been.

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magazines

The easy counter impulse line – Racing Babies

Racing Babies is a simple product, fun and almost disposable … a perfect impulse line at the counter. Purchased easily by people of all ages, this is an example of an easy, fad-like, product with which to drive basket value.

Racing Babies has worked for us this Christmas – yet another non-traditional product line working in a newsagency.

These counter lines change every few weeks. Get in, sell through, replace with something fresh.

Here’s a video from the maker, which has helped attract shoppers for the product.

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Fun

Retail sales in Australia up 7% in November

The ABS yesterday released preliminary results for retail sales in Australia for November.

The seasonally adjusted estimate rose 7.0% ($2,071.6m) from October 2020 to November 2020.

In seasonally adjusted terms, Australian turnover rose 13.2% in November 2020 compared with November 2019.

As I have noted in this place already, plenty of newsagency businesses for which I am fortunate to have seen data delivered even better results, 20% and more growth in November 2020 compared to November 2019.

I’ve talked to other retailers too, jewellers, toy shops, bike shops, garden centres and more, almost all were up in November. Those doing best are those playing beyond what has been traditional for their channels.

That said, I am not in the retail is back camp. No, my view is that retail has fundamentally changed. It will not go back to where it was. The future is the future and not a re-visit to the past.

What we sell, how we sell, when we sell and to whom we sell has changed and will change further. Covid has sped-up changes that were occurring already.

This is all good stuff for retailers who embrace change.

The ABS preliminary figures are good for the whole economy as the growth they report encourage optimism for 2021.

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Newsagency management

The easy $145.00 Christmas gift for guys

While it is cliché, plenty of guys love car racing, they love Supercars. This $145.00 set from the Royal Australian Mint has been a terrific hit for Christmas in the newsagency. Better still, people buying this are buying other coin sets, too, driving excellent basked value. Plus, they usually buy a gift bag and a card or two.

The coins are an easy social media pitch and that’s key to helping to bring shoppers in who might otherwise not have shopped with us. People don’t know what they don’t know. Hence the importance of social media posts like this.

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newsagency marketing

Legacy newsagency suppliers are wrong: traffic from one successful product category does not always drive success for another product category

Looking deeper at data from a bunch of regional newsagencies for November / December this year compared to last year, it is obvious that traffic from low-margin legacy products is not key to the health of a business.

In each case, local newspapers closed, slicing hundreds of transactions from each business each week. There was no negative financial impact. Transaction count was down, but not revenue.

Even though I have commented here for many years about the inefficiency of newspapers for retail newsagencies, plenty of newsagents are discovering it for themselves. The newspaper shopper is likely to purchase a newspaper and nothing else around 80% of the time – less so in regional Australia, far more so in capital city shopping centre newsagencies.

Plenty of local newspaper closures are not adversely affecting the performance of newsagencies.

For decades, newspaper publishers, and other low-margin legacy suppliers, said yes our products are low margin but they drive traffic and you make money from that.

No, most low-margin legacy products are inefficient for newsagents. They may sell in volume. however, rarely does that shopper purchase higher margin items. No, the new higher margin items newsagents source often drive net new traffic.

While the closure of local newspapers is disappointing for the reach of local news, retail newsagents can have a bright future regardless.

I get that retailers like foot traffic. The key, however, is that foot traffic has to be commercially valuable. Single item purchase of low margin product is not as commercially valuable as it once was.

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newsagency of the future

Are you changing your January plans from the traditional?

January will not be normal.
January has traditionally played out in different ways for small business retailers in different parts of Australia.

In some parts of the country, retail is usually so slow that many shops close for several weeks. In other parts of the country, towns swell with tourists and trading hours are extended.

What has been consistent about January for small business retail in Australia is that it has been prdictable.

I don’t think January 2021 will play out in a predictable way.

People are not travelling overseas. But, they are motivated to travel, to shake off 2020 and to start 2021 with new memories, from more local travel.

With plenty of annual leave not taken in 2020, I suspect more will start 2021 taking leave.

Businesses will start 2021 earlier than usual, working on new approaches to business, including on-going working from home for some, which will open opportunities locally.

Places that have not seen many tourists over the years are likely to see some. Tourist destinations will fill early, encouraging people to look elsewhere.

In short, the usual January slowdown we have been used to in small business retail in most parts of Australia is less likely in 2021, in my view.

Locals staying local will be looking to embrace optimism about 2021. Local retailers can lean into this, nurture optimism and offer opportunities for engagement with the local community. In our shops we can make January fun and feed into the desire for a good start to the year.

Be ready. Make sure the shop is fresh, that you have new product and that ou provide an entertaining retail experience. Think about your hours. Find ways to leverage the changed situation.

I mention this today so you can plan. January will be different. How it plays for you depends on you.

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Uncategorized

Dynamic Supplies takes a stand on behalf of its customers as HP asks for access to end customer data

This email from Dynamic Supplies from earlier this week indicates that HP, a key supplier of ink and toner through them to newsagents, is seeking access to end customer data. This would concern any retailer of these products.

The letter from Dynamic is worth reading. Their approach puts the needs of their retail partners ahead of the demands of HP, which is terrific to see.

Dear Valued Dynamic Supplies Customer,

As you may be aware, HP recently introduced changes to their distribution “partners” agreements by introducing a new Global Partner program called Amplify. This new program effective 1 November 2020 immediately impacted the HP print consumables and hardware categories and as a result we advised the retraction of all HP discounts and rebate programs.

One of the conditions of the new Amplify program is the compulsory reporting to HP of extremely detailed private data including confidential customer and inventory related information. We are very concerned that HP want this information which includes your end user drop ship information including customer names and addresses and purchase data, in addition to sell through data on compatible versus HP original supplies.

I write to you today to advise that Dynamic Supplies will not comply with this data collection program and will not at any stage provide your private customer data without your express consent. It conflicts with the core values of our organisation and we believe this sets a dangerous precedent within the print distribution channel. Whilst the request for information from HP may or may not be illegal, we regard this as a highly unethical program. HP is offering significant incentives and rebates for this data and we regard this as little more than a bribe. Dynamic Supplies have opted out of this program and are referring this matter to the ACCC.

Dynamic Supplies has always operated with the best interests of our resellers at heart. We are communicating this information so that you are aware that if you purchase HP products from an authorised HP partner, those partners will be providing this data to HP as part of the Amplify program requirements.

17 years ago Dynamic Supplies fought a similar battle with HP to protect the best interests of our Reseller customers. This included the refusal to collect and supply end user data and support predatory pricing behaviours. It is familiar territory for us and we will again defend the interests of our channel.

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Ethics

Covid safe retail advice for NSW newsagents

With the Covid surges in NSW causing concern, here is a modified version of advice I shared with Victorian retailers in June:
  1. Have hand sanitiser at the entrance to the shop and at the counter.
  2. Have all customer facing staff in masks.
  3. Acrylic screens at the counter are a big help.
  4. If you can trade outdoors at all, do so we know outside is safer.
  5. Check your in-store communication re social distancing.
  6. Maintain good cleaning practices using anti-bacterial wipes.
  7. Remind everyone working in the shop about hand washing.
  8. If you serve in an area where English is not a dominant first language, consider using the resources at this SBS for Covid information in many different languages are excellent.
  9. Consider this social media post: With Covid challenging again, it is important that we maintain a safe and healthy distance, wash our hands regularly, use hand sanitiser and stay home if we feel unwell or have any Covid symptom. here at the shop, we offer hand sanitiser, clean regularly and enforce social distancing. Let’s squash this thing, again.

Retail businesses like newsagencies are front line businesses. The safer you make it for your shoppers and the calmer your messaging the better you will trade through this.

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Social responsibility
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