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

Author: Mark Fletcher

Hmm … the ATO benchmarks lag

I checked out the current ATO benchmark for newsagency businesses this morning and, as is usual, they are lagging behind reality.

From the description …

Businesses in this industry sell newspapers, magazines and similar publications, greeting cards, stationery and lottery products, and provide a delivery service for newspapers and magazines. They may also sell confectionery, drinks, phone cards, transport tickets, toys and gifts. Services provided may include photocopying, fax and other similar services.

to the data, the ATO needs to update this.

4 likes
Newsagency management

Newsagents: file your contracts

I was part of a discussion with several suppliers to newsagents this week and each complained about poor record keeping by newsagents.

This usually comes up because pop a breach of an agreement or a desire by a newsagent to switch suppliers. The contract gets raised and the newsagent says they don’t have a copy of it, often saying they were never given a copy of it.

Two of the suppliers mentioned that they keep records of when contracts are signed and when a copy was sent to their retailer customers.

I was helping one newsagent a few years ago with cards and they said they did not have a card contract. I checked with their then supplier, a card company I’d never dealt with. Sure enough, there was a contract and it had two years remaining.

All of this is easily resolved.

Any time you sign a contract or agreement, keep a copy, file it for easy access. Not doing this wastes time down the track.

This is pretty basic business stuff. It’s frustrating that among some suppliers the channel is known for poor record keeping.

2 likes
Newsagency management

Minimum wage increase

While media outlets have covered the story, business owners are best served going to the source. Click here to go to the Fair Work website page with all the details. For our channel, it includes this:

Most awards will increase from 1 July 2021. Wages in the Retail Award will increase from 1 September 2021 and the rates in 21 other awards where the FWC deemed there were exceptional circumstances will increase from 1 November 2021.

The best way to stay fully informed is by subscribing to their emails. Click here to do this.

1 likes
Newsagency management

Displaying remainder books with pride in the newsagency

Remainder books in newsagencies are often placed flat on a trestle table or in a dump bin. That is what we did for ages. Then, we tried treating them with pride, by displaying them in a way similar to what you may see in a bookshop.

This simple change boosted good sales to excellent sales.

Better still, customers commented, complimenting the display.

The photo shows part of the display. It’s located mid-store and is working better than the dump bins we had at the front of the store.

This particular store is not a bookshop, not even close. We are limited by the lease as to the percentage of floorspace we have give over to books. This display is us at capacity.

The change is display from something that looked cheap and somewhat apologetic to this display that is classy and proud lifts the shop and sees the return on investment from books growing beyond already good sales. It took a few minutes to create. The initiate was by a new team member who thought they could do better … and they did, for which I am grateful.

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Book retailing

Is News Corp considering print changes in Queensland?

The frustration with late newspapers is being expressed by customers and newsagents in Queensland. So frustrated are some newsagents that they are actively discussing quitting the category as the grief of late papers is not worth it.

Newsagents getting newspapers from News Corp. after 10am each day makes for a tough day in the shop, understandably.

I’ve been told that News Corp. execs have were meeting last week to discuss making further changes to fix the late newspaper problem.

8 likes
Newspapers

ICYMI: WH Smith has 120 stores in Australia

UK newsagent retail group WH Smith now has 120 stores in Australia, across 8 consumer-facing shingles.

In 2011, WH Smith was early in their Australian journey. In 10 years they have come a long way. Their Australian retail group is diverse, and I think that is a strength.

The number of corporate stores in the group is an important strength, as central decisions applied to a group of stores is efficient for their focus on travel convenience.

I like the clarity of their published goal:

OUR GOAL IS TO BE THE LEADING RETAILER IN CONVENIENCE, BOOKS AND NEWS FOR THE WORLD’S TRAVELLING CUSTOMER.

Convenience is a competitive space, especially convenience in the travel setting. Locally owned indie businesses struggle in terms of buying power, marketing spend and in-store consistency.

Kudos to the folks at WH Smith for what they have done in Australia over the last 10 years. I did not expect them to be where they are today.

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Competition

Clever visual merchandising engages shoppers

This display is working a treat in the newsagency. Terrific comments and, better still, sales.

When it comes to VM, every day for us it is about playing against expectations and assumptions, trying, through product range, placement and display to pitch a narrative that is fresh and relevant to now rather than a reinforcement of a past.

6 likes
visual merchandising

News UK writes the value of The Sun newspaper down to zero

News Group Newspapers, a subsidiary of News UK, has written down the book value of The Sun newspaper to zero, reports The Guardian:

Rupert Murdoch has written down the value of the Sun newspapers to zero as the impact of the Covid-19 pandemic helped to fuel a £200m loss at his flagship tabloid titles.

Advertising and sales revenues at the Sun and the Sun on Sunday plummeted, with turnover falling by 23% from £419.9m to £324m in the year to the end of June 2020.

The torrid market conditions, coupled with one-off charges related to ongoing legal action over allegations of historical phone hacking, led to pretax losses more than tripling from £67.8m in 2019 to £201.4m.

As a result News Group Newspapers, the subsidiary of News UK that operates the two titles, wrote down their value to zero. The £84m non-cash “impairment of publishing rights” essentially means the publisher does not believe the titles will return to positive growth.

Another factor is the value of the daily print newspaper as an advertising platform. As more ad dollars flow online and elsewhere, the economic value of the print product fades.

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Media disruption

Tyro proactive in support for retailers impacted by terminal outage in January

Tyro continues a pattern of clear and timely communication with its retail partners about the terminal outage in January and, in particular, the support package it offered affected businesses. They have a structured process, which has been pitched to retailers by email:

​​​​​Further to our earlier emails in February, we wanted to remind you that the registration page for impacted customers of Tyro’s January terminal connectivity issue is still open.

If you have suffered a financial loss and would like to be contacted by us regarding your particular circumstances, please complete the registration process outlined below. Upon completion of this process, we’ll review your particular circumstances and then provide you with options for either proceeding with a simple claim or through case management.

Important: Please complete the registration process even if you previously raised your concerns with us in writing or on the phone.
​​​​​
1. Click here before 31 August 2021 to go to the registration page; and

2. Check the tick box and click the submit button on the registration page before 31 August 2021.

Please note that you will be registering the Merchant ID(s) that Tyro has recorded as having been impacted. This email address is associated with a business owner (or equivalent) user role for those Merchant ID(s).

We will do all we can to expedite our response to you, however this could take up to six weeks following your registration.

For any assistance or questions, please contact our 24/7 Australian-based Customer Support team on 1300 966 639 (select option 0) or cs@tyro.com.

Regards,
The Tyro Team

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Social responsibility

Where are the people looking for work?

I know of several retail businesses looking for employees right now, and struggling to attract applicants.

Above award rates have not attracted people, nor has reasonable roster flexibility for the casual roles.

Is it that retail has lost some appeal? Has Covid made people wary of casual work?

Where has the usual pool of uni students who would take these roles gone?

I’m not suggesting people who could apply are bludging or that government benefits for the unemployed are too high. I don’t support those tiresome and unsubstantiated views.

It does feel like something has changed. A year or two ago, a retail manager ad offering $60,000 a year would attract 30 applicants in a couple of days. Now, you are lucky to get one applicant. Like I said, it feels like something has changed.

Maybe there are less international students and the roles they would take for 20 hours a week are being taken by people who might otherwise apply for retail casual roles.

In terms of full time, maybe people who may have moved jobs 2 years ago now stay because they don’t want to be in a new role while Covid is in the community.

Regardless of the reason, it is challenging at the moment to full vacancies.

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Newsagency challenges

The mid-store VM pitch in the newsagency

While there is no doubt that the front of any shop is key, the middle of the shop is equally important, but often neglected.

It’s in the middle of the shop where you get to speak to shoppers, people looking for something, people wanting to be sold to. People who spend Tim in the middle of the shop are less likely to be convenience shoppers or destination shoppers – depending on what is located where in your business.

We use the middle of the shop to tell stories of categories and ranges of which we are proud. Take our latest baby / young kid pitch.

This beautiful display, not done by me, is a stunning representation for the category. It is placed with cards for the same occasions nearby. It is also placed so as to not hit magazines from being seen from outside the business.

It’s a display unlike what a newsagency in Australia is known for, like many of our shop floor displays.

Shopper reaction has been wonderful through words and purchases, both are important, of course.

This mid-shop space has the same lease cost. make it work.

Key to success is that you do not have purpose made shop fixtures. Simple fixtures you can mode and adjust are key here. This allows you to crate for the requirements you have right now.

My message today is – look at that mid-shop space you have, think about how you can use it to benefit the narrative of your business. Don’t let it be wasted space, space in which you are not invested.

Retail newsagency management today is about innovation, with a budget, chasing a commercial outcome, in supporting of the narrative you want for your shop.

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Newsagency management

Growing gift packaging revenue in newsagencies

Gift packaging – bags, wrap, tissue, accessories – is often a neglected category in a retail newsagency business.

Outside of our newsagency channel, a card and gift retailer can see 20% of their total card / gift packaging revenue come from gift packaging. In our channel, the number is usually somewhere between 5% and 10%.

Gift packaging has been a focus in one of my shops over the last six months. It was accounting for 3.7% of revenue within cards/gift packaging. Looking at our most recent data this morning, it is contributing 6.2% of total gift packaging revenue. This growth is even better considering the overall card/gift packaging revenue growth of 36% being achieved.

Thinking of gift packaging more broadly, here are gift packaging revenue contribution percentages by segment a key supplier in this space shared with me as a benchmark:

  • Bags: 37%.
  • Rolls: 30%.
  • Tissue: 11%.
  • Folded wrap: 11%.
  • Accessories: 7%.
  • Wrap flat (sheets): 4%.

I share this because one way we are growing our packaging revenue is by looking at sales for each segment carefully.

The tissue segment contributing 11% of overall gift packaging revenue has surprised some I have discussed these percentages with. They felt it was too high. Considering the innovation in the tissue space and seeing this product in my own shops, I see the 11% as a useful benchmark, and one I want to pass.

While, for sure, growth in gift packaging revenue relies on having access to products your customers want. Your engagement is key, it is the starting point for change. Your engagement will drive supplier engagement. As I am seeing in so many cases now, excellent growth is there for the taking.

Check out your year on year gift packaging results. Compare your segment revenue contribution to the benchmarks shared here. You may discover an opportunity to manage for success.

Data is the key here, good data. Good data is key to good business decisions. Your data is far more useful and relevant than supplier sell-in data. While there is a place for supplier data and insights, when it comes to your shop and decisions on range, captions and placement, your data will matter the most.

My advice to all newsagents is – take ownership of the card / gift packaging area of the business. It will reward your attention with revenue growth, good margin revenue growth.

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Greeting Cards

Free newsagent workshop today @ 10:30am

I and some of the newsXpress team are hosting a workshop today about cards, sharing insights from the newsXpress developed intellectual property that its the basis for card sales growth of  between 25% and 75%. 

At this free workshop, I will show you actual results, which you will be able to verify. One of our newsXpress team members will step you through the work involved to achieve the results. Often, we are achieving excellent results with no capital spend.

We will show you the most comprehensive card performance reporting you will see for any card retailer in the world. I understand that is a bold claim. Once you see what we will show, we think you will agree.

Today, June 8 @ 10:30am if you want to grow your card sales. Here is the link:

https://zoom.us/j/98961647990?pwd=cy9wdnllL1JqYlFyUDdkR1FISlFrUT09
Meeting ID: 989 6164 7990 Passcode: 519968

In the meantime, if you have questions, please email help@newsxpress.com.au.

Yes, I am a Director of newsXpress

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Greeting Cards

Thinking of you week to support greeting card engagement

Some of our major card companies are supporting Thinking of you week, which runs from June 20 through 27.

The goal of the week is to encourage shopper engagement with cards.

This is an easy promotion to engage with through, without having too purchase additional stock:

  1. Placement of cards you love at the counter.
  2. Creating a Staff Picks selection of cards for customers to see.
  3. Placement of cards in an additional location near the store entrance.
  4. Making cards the focus on social media leading up to and including the week.
  5. Sending more cards yourself.
  6. Hosting an in-store event around cards.

Cards are the best margin physical product in-store. Shining a light on the category makes good business sense.

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Greeting Cards

How the newsXpress newsagency marketing group is helping newsagents transform in 2021

Yes, to some this will read like a marketing pitch. They would be right, in part. But, it is more than that. I share this information here to show that there are newsagents doing well, transforming their business, leveraging intellectual property top grow profitability, and through that, business value.

This is the story in 2021 about our channel, the extent to which newsagency businesses are thriving. I can speak to the newsXpress experience because of my direct involvement.

See for yourself. Click here to access a new 49 page book published outlining in detail what newsXpress offers.

Already in 2021, newsXpress has delivered valuable and exclusive benefits:

  1. A data driven greeting card strategy that has delivered 25% and more year on year card sales growth to retailers who have engaged.
  2. A bonus 5% gross profit from more than 50 preferred suppliers – real bottom line benefit. Funded 100% by newsXpress. For all orders from April through June 2021.
  3. A new marketing video service delivering personalised videos for your business, which you can use on social media.
  4. 100+ new social media posts ready to use to freshen your social media feed.
  5. Ten new product supplier videos shot exclusively for newsXpress members, sharing insights into how to find and sell to new customers.
  6. New suppliers offering access to new traffic generating products usually not available to newsagents.
  7. A lower monthly membership fee.
  8. Half price Shopify website. Provding access to a beautiful, personalised, business website for your business connected to the Tower POS software.
  9. First to market insights for toys, helping our members better tap into this lucrative product category.
  10. A creative writing competition attracted plenty of entries and helped people see newsagencies differently. We funded the $2,000 in prizes.
  11. A Mother’s Day art competition is already attracting wonderful entries.

Best of all is the optimism for a bright future these and other developments nurture.

Footnote: I am a Director of newsXpress Pty Ltd

9 likes
newsagency marketing

Customers reacting well to QR code check in vigilance

We have seen an increase in compliance with QR code check ins in-store. While compliance was okay before, it is even better now thanks to clearer media reporting.

This photo is a table on the lease line. We have a secondary point in-store as well as QR code posters at the counter.

While we chose to use government collateral, some nearby retailers made their own, and the message gets lost.

2 likes
Social responsibility

Are Media to acquire Ovato magazine distribution business

Announced this morning:

Sale of Retail Distribution (Australia and New Zealand) to Are Media Limited 

Ovato and Ovato New Zealand Limited have entered into a binding sale agreement to sell the entire issued share capital of each of Ovato Retail Distribution Pty Ltd and Ovato Retail Distribution NZ Limited (together, “Retail Distribution (Australia and New Zealand)”) to Are Media Limited (“Are Media”) (the “Transaction”). 

The consideration for the Transaction comprises a headline purchase price of A$15 million in cash and the acceptance of a negative working capital position of approximately A$27 million. 

Are Media is a 16.4% shareholder of Ovato and is accordingly a substantial holder in Ovato for the purposes of ASX Listing Rule 10.1. Therefore, shareholder approval will be sought for the Transaction to comply with ASX listing rule requirements. Ovato intends to dispatch a notice of meeting in relation to the Transaction mid-June 2021, with the meeting to be held mid-July 2021. 

The major shareholder of Ovato, the Hannan family, who collectively hold 43.4% in Ovato, has indicated its support for the Transaction and intends to vote any shares it holds in favour of the Transaction at the proposed shareholder meeting. 

Ovato has engaged an independent expert, Lonergan Edwards & Associates, to determine whether the Transaction is fair and reasonable to Ovato shareholders who are not associated with Are Media. 

Subject to the satisfaction or waiver (as applicable) of the conditions to the Transaction (which include customary regulatory approvals), it is currently expected that the Transaction will complete by the end of July 2021. 

Put option to sell Marketing Services (Australia) to Ballygriffin Holdings Pty Limited 

Ballygriffin Holdings Pty Limited (“Ballygriffin”), an entity owned by the Hannan family, and Ovato have entered into a binding put option deed under which Ovato could require Ballygriffin to acquire the entire issued share capital of Ovato Creative Services Pty Ltd, Ovato Technology Pty Ltd, Ovato Communications Pty Ltd and Ovato Creative Services Clayton Pty Ltd (together, “Marketing Services (Australia)”) for A$9 million. 

Ovato Limited – ABN 39 050 148 644 

Shareholder approval will also be sought for this transaction to comply with ASX Listing Rule requirements. 

Ovato has engaged an independent expert, Lonergan Edwards & Associates, to determine whether the entering into the put option deed is fair and reasonable to Ovato shareholders who are not associated with Ballygriffin. 

It is expected that the timing of the shareholder meeting will be similar to the Transaction referred to above. 

Change of CEO & Managing Director 

Kevin Slaven has advised the Ovato Board that he will not be seeking an extension to his current contract which expires on 17 September 2021. It has been agreed with Kevin that he will step down as CEO & Managing Director and remain in the business until the end of June to assist with the business sales and to ensure an appropriate handover. 

James Hannan, currently Chief Operating Officer with over 18 years’ experience in print operations and senior executive responsibilities since 2014, has been appointed as the new CEO & Managing Director effective immediately. James, whilst responsible for the Group’s operations, also played a pivotal role in the successful negotiations with all stakeholders through the recent recapitalisation and restructure of the business and is spearheading the non-core assets divestment program. James will be very ably supported by existing members of the leadership team. The key terms of James’s employment contract are disclosed below. 

Michael Hannan, Chairman, says “The challenges of the industry over the last decade were further exacerbated by COVID-19. In response, the business will bring its focus back on print, the core of its operations. It will allow focus to be placed on a strong, viable and profitable printing business in Australia and the ability to invest in new technologies to support print. The sale of the Retail Distribution and Marketing Services businesses will greatly assist in providing Ovato with cash reserves for ongoing transformation and will be the catalyst for a significant flattening of the corporate costs starting from the top with immediate savings being realised by not replacing any departing member of the leadership team.” 

Referring to the change of CEO, Michael Hannan says “The Board recognizes the role that Kevin has played in a very difficult period for the company since being asked to take the reins unexpectedly in late 2017. He has addressed the challenges completing a very complex merger of two of Australia’s largest print businesses; IPMG with PMP, followed by a significant operational and corporate restructure to right size the business required by market conditions and the COVID-19 impacts. 

The Board wishes to thank Kevin for his guidance and leadership through this difficult period, and for his loyalty and dedication to the company. We wish Kevin well in his future endeavours.” 

This announcement was authorised for release by the Board of Directors of Ovato. 

I predicted this when Are Media first acquired a stake in Ovato. To me, it made a logical next, step move.

1 likes
magazine distribution

Coles vs. newsagents

This is one of the weirdest videos I have seen. It was uploaded to YouTube a few days ago. In it, the presenter compares packs of AFL collector cards purchased from Coles compared with the same products purchased from a local newsagency. While the video is weird, it is weirder that it has had 995 views already.

Don’t judge me for finding this. I was looking for something else and found this. Seriously odd.

0 likes
Uncategorized

National donut day

Today is national donut day and, yes, it’s a day created solely for commercial purposes, like some other days from which our channel benefits.

Anyway, we celebrated early at the office yesterday.

 

 

 

 

 

 

These locally made donuts were a delicious treat, a reminder that having fun is good, and tasty.

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Fun

Invitation to all newsagents

Invitation: June 8 @ 10:30am, online.

I write to invite you to a free Zoom meeting at which I and some of the newsXpress team will share with you the EXCLUSIVE TO NEWSXPRESS data-driven process that has resulted in successful newsagencies growing card sales by between 25% and 75%. Yes, those percentages are real.

newsXpress has developed intellectual property that it uses to guide in-store card changes, based on the sales data from that store.

At this free workshop, I will show you actual results, which you will be able to verify. One of our newsXpress team members will step you through the work involved to achieve the results. Often, we are achieving excellent results with no capital spend.

We will show you the most comprehensive card performance reporting you will see for any card retailer in the world. I understand that is a bold claim. Once you see what we will show, we think you will agree.

Join us June 8 @ 10:30am if you want to grow your card sales. Here is the link:

https://zoom.us/j/98961647990?pwd=cy9wdnllL1JqYlFyUDdkR1FISlFrUT09
Meeting ID: 989 6164 7990 Passcode: 519968

In the meantime, if you have questions, please email help@newsxpress.com.au.

Yes, I am a Director of newsXpress

4 likes
newsagency marketing

Time for an EOFY sale

The next few weeks provide an excellent opportunity to bring out everything you want to quit to the front of the store under the banner of EOFY SALE.

Let it go as the song says, quit the stock with prices that will see that achieved in days, not weeks.

EOFY is the one time when copying big retailers makes sense. You can ride the noise of their ad campaigns re EOFY.

Keep it simple: no pretty displays, this is all about a price offer, front of store, to attract people who are walking past.

1 likes
Newsagency opportunities

Learning from Officeworks product placement

That space as you head toward the counter is premium in any retail business. So, too, is the counter itself … but today I want to focus on the space close to the counter, as the customer approaches it.

Officeworks have been getting this space right for a while now, placing impulse lines there that are easy to pick up. It is their product adjacencies that are particularly smart.

Take this example of art supplies. They have a bunch of items together that could see a parent or other relative pick up several items to make for a nice gift for a kid.

This photo shows items three or four steps from the counter. No need to shop the shop, move between different locations, all you need is there.

There were more items than I caught in this photo.

I like this mix of products as it shows what’s possible at or near the counter. For too long in our channel we focused on low price, convenience lines. While some in our channel are having success with more expensive items at the counter, most continue to play in a more traditional way in this space.

Taking a look in-store at an Officeworks store and their counter related pitch could be useful.

2 likes
Newsagency opportunities