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

Forward leaning newsagencies popular with landlords

I have noticed a shift in what landlords of small, medium and large centres are looking for from newsagency businesses.

Whereas in the past they sought restrictions to control the businesses to traditional offerings, today more are wanting to partner with retailers who are actively playing beyond the traditional boundaries.

This is especially true in regional centres. They want businesses that are focussed on generating valuable traffic for the centre beyond their businesses. Whereas in the past papers, magazines and lotteries did that job, today I am often asked what a business might bring that is unusual, that shoppers could be willing to drive an hour to see.

In the last week I have received approaches from three landlords with such requests. They want newsagency businesses, but ones that genuinely add value from what has been traditional for the channel.

This is a good trend in my view, line that encourages optimism.

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newsagency of the future

Chasing new traffic this week for newsagents

newsXpress stores are this week chasing new traffic with a national TV ad campaign for Beanie Boos. Ranked in the top five revenue generators in their category, Boos are valuable at attracting shoppers, driving impulse purchases and boosting basket value.

I think it is important we promote our businesses externally through products we are not naturally thought of as stocking. By all means promoter legacy products in-store and locally, but for broad mass media attraction, we need a fresh pitch to reflect our fresh and relevant businesses.

There are two TVCs running – the one below and another that is “C” classified brand positioning, without a value offer.

I was directly involved with the production of the TVC and want to comment that we worked hard to get the right voice, to speak to the target shopper. The script was thoughtfully developed to pitch not only the value proposition but also the fun of the brands of Beanie Boos and Flippables. The images are deliberately diverse as Boos appeal, primarily, to boys and girls from as young as 5 to and old as fifteen, sometimes older.

One final point before we get to the TVC. Some may think that Boos are only one part of their business. They are right. However, there is evidence that they work at attracting new shoppers who are valuable beyond the Boo purchase. They buy cards, toys, gifts and more. Plus, these shoppers return. So, Boos work as a lure.

I’d also add that no other business runs a Boo only TVC. This is a differentiator,. We could promote stationery, but, hey, many businesses do that already. Swimming in the blue ocean is something I like.

Oh … the TVC is working. Reports of sales boosts are terrific.

Here is the general target TVC:

Now, in case you are wondering, here is the “C” release TVC. Producing this considerably enhances the return on ad spend for us.

This ad plays in prime kid viewing times.

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Newsagency marketing group

Retail management advice: reduce visual noise

Visual noise can block sales in retail, especially in a shop with products that themselves are colourful, like a business with cards and magazines.

Suppliers add to the visual noise challenge with suggestions (demands from some) for displays focussed on their products.

Your visual noise strategy for your business needs to serve your business.

Less is more, usually. Less noise means that the messages you do have are more likely to be noticed.

Stand outside your retail business and count how many different messages you pitch from the front of the shop through to the counter. Look at how organised they are, what they demand of the customer, what they pitch, the ease of understanding them.

Make a list.

Start cutting.

You have a few seconds to get attention. the more focussed you messages the more likely they will be understood and acted on.

What does all this actually mean? Less posters. Less signs. Less feature displays. Less visual noise. So what you want noticed is more likely to be noticed.

Finally, an oldie but a goodie: show, don’t tell.

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Management tip

Driving relevance for the newsagency

Here is our in-store pitch in support of the new Toy Story film out this week. Online, too, we are similarly engaged.

Connecting with blockbuster movies is lucrative, especially using products with 50%+ GP and that offer net new traffic.

Finding new traffic starts with product. It works well when you can connect with a popular licence. That is the motivation for this Toy Story pitch. The franchise is strong and the advance buzz for this new movie is terrific.

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Gifts

OzLotto $80M

Okay so OzLotto did not go off and next week’s jackpot is now $80,000,000. This offers a nice traffic boost that lottery retailers can leverage. It’s an opportunity to seize.

From the front door, within the rules of what is allowed, pitch what differentiates your business, what can be easily understood and what could bring them back.

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Lotteries

The ethics of sales reps and those they work for

Some sales representatives who call on newsagents and other indie retailers will do anything to get you to buy their products or service.

Retailers would know who I mean – they are the sales people who try and win business by lying about the competitors.  It’s their point of difference.

I am talking here about outright lies and not just tough competitive positioning.  It speaks volumes for their belief in their own product that they focus on the competitors more than themselves. Thankfully, business won this way often bites them sometime down the track.

If a supplier representative says anything to you about a competitor of theirs, ask them to prove it.  This will soon shut them up.  Better still, go to the company or person they are speaking about and let them know – it is what you would want if it was you they were talking about after all. Or even better still, write down their claims in front of them, with date and time and their name. Make it clear you will hold them to what they have said.

It is essential you have evidence down the track should you need to confront them or their boss about claims made.

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Ethics

Independent media gathers steam while mainstream struggles: latest numbers

At Michael West’s excellent indie news and analysis site is this terrific report about the growth in engagement with independent media:

Independent public interest journalism continues to attract larger audiences. Growth in online readership at www.michaelwest.com.au jumped 67 per cent in the last quarter. Kim Wingerei at theIndependents.org.au reports.

AUDIENCE GROWTH at michaelwest.com.au is part of the broader trend — the latest report for independent digital media shows overall growth of 21.7 per cent in the 27 sites in the index, while the “big four” – Sydney Morning Herald, The Age, The Australian and News.com.au – continue to decline in print and battle to get enough subscribers behind their paywalls to fund their newsrooms.

In the week when Crikey announced much welcome additions to its journalism ranks, it is great to be able to report the continued growth of online independent media(1) in Australia. In the third quarterly report, the 27 online sites(2) tracked grew their web traffic numbers by 21.74 per cent from February to May 2019. With the previous period growth of 10 per cent, that is a whopping 33.9 per cent compound growth over the last six months.

Crikey is another one of the outstanding performers on the list with 49 per cent monthly growth in visits – to 446,000 in May (despite having a paywall) according to SimilarWeb – an online audience measurement service. Crikey will need that kind of growth to help support the addition of a dozen journalists in their new INQ unit (”Inquiry Journalism”), but they seem to have found the right balance with their subscription model and funding from high net worthers Cameron O’Reilly and John Fairfax.

This is not only happening in Australia. Around there world there is growth in subscriber and reader engagement with independent media. This is a healthy trend in terms of news access. It is an interesting trend for retailers of news products, like newsagents.

I subscribe to four independent news outlets in Australia. I appreciate their independence. What these sites are doing for news is similar to what our businesses can do for retail. We are independent, competing with big business.

Read more of the above article here.

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Media disruption

Magazines as stationery

Typo has a range of journals that look like National Geographic magazines, as part of their front of store stationery pitch. I have see it in three of their stores in the last two weeks.

They have gone for iconic covers that resonate. It’s a smart move by this forward leaning retailer. It would work well in our channel.

While we continue to pitch functional stationery, stores like Typo are growing sales through fashion related moves that encourage purchase beyond need.

This is the future of stationery growth. As paper is used less, we need to expand the reasons for people to purchase stationery products, if we want to remain in the category. No, a cute looking journal will not cut it.

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Stationery

Smart move to pitch a lottery ticket as a gift

I love this pitch in a Wellington, New Zealand, lottery outlet of cards next to the lottery terminal. It guides shoppers about a lottery ticket (or product) as being ideal for slipping into a card, subtly encouraging the shopper without in-your-face marketing. It’s show, don’t tell.

I suspect that the placement of greeting cards next to the lottery counter helps in some way drive lottery product purchase – and not distract from general lottery product purchase.

It would be interesting to see this tested in a structured way in Australian lottery outlets, to see if the placement benefits card and lottery product sales. Such tests could be run in association with the lottery companies given the mutually beneficial outcome being sought.

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Lotteries

Should we consider armed security guards to cut theft?

Gerry Harvey has called for consideration of this.

“In a lot of our stores overseas, where we’ve got the security people, they’ve got guns on them.

“Now if those kids knew there was a security guard there with a gun on him, they would not have gone in.”

In my experience employee theft is a higher cost to retail businesses than shopper theft. But my data is from indie small businesses. Maybe in Gerry’s stores, people do walk out with washing machines and fridges.

I think the last thing we need is armed guards in retail. But, hey, Gerry loves a headline and he sure got that this week with this pitch of his.

I’d like to see evidence on what is being stolen by store type. This could inform a more educated and less shrill discussion.

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theft

New magazine launch targets valuable core shopper demo

The launch tomorrow of It’s Your Day by Bauer Media is important for newsagents as this new title targets a demographic that is key to our channel – women 35+. This is the demo that spends the most on cards, visits most often and connects best with the newsagency channel.

The launch of It’s Your Day by Bauer provides us with an opportunity to re-up our pitch to this high-value newsagency shopper, to deepen the connection and leverage the launch activity.

The marketing around the new title launch offers us an opportunity to pitch our local businesses and to do this in a way that separates us from supermarkets and others. For them, this title will be another SKU whereas for us it feels at home with our core customer.

Engaged card companies will be especially happy about this new title. I hope they take the time too understand that target reader for It’s Your Day is the target shopper top off mind for the card companies, and their retailers.

We don’t see many magazine launches from major publishers. This launch is important, a valuable investment in print. In some respects, how it goes in our channel is up to us.

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magazines

Making the decision to close on public holidays

More and more newsagents are deciding to close on public holidays given the high labour cost (or high family time cost), declining newspaper margin in real terms, often mediocre foot traffic, less destination traffic for magazines and active competition from others for core traffic categories in the daily or several times a week purchase category.

At least once a week a newsagent sends me sales data by day of week and time of day for a discussion about these and similar topics.

While my preferred option is to look for opportunities to make situations work trough recasting the appeal of the business, sometimes, a small retreat is what is needed.

I think this is why plenty of newsagents will be closed today, Queen’s Birthday (in most states).

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Newsagency management

Marketing tip: leverage local artists to drive traffic for the newsagency

Find a wall in your shop and turn it into a mini gallery space for local artists. Make it available at no cost.

Choose artists based on their social media following and the shoppers they could attract to your business. Check their Facebook and Instagram followings. Look at numbers as well as how they engage. This is important that new new traffic is key in business today.

The benefit for them is that you help them find new customers too. The relationship has to be mutually beneficial.

The photo is from a shop I have visited. On the wall they had a small showing of photos taken by a local young photographer. There was nothing commercial about it.

To me, this idea is a not brainer for any regional, rural or high street independent retail business. The more we support our local community the more likely the local community will support us.

The added benefit is the beauty you can bring to the shop.

Be a force for good: support local artists and give locals another reason to visit your business.

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marketing

Lottoland takes legal action against the federal government

Following the decision announced by ACMA yesterday, Lottoland has commenced proceedings against the federal government. This quote from Lottoland from the SMH story plays until current debate about freedom of expression and beliefs:

“We are fighting for freedom of choice.”

Talk about tugging at heartstrings. I hope people see this argument for what it is … nonsense. I think Lottoland is fighting to sell its gambling products. Punters are their customers, not a movement of people who feel aggrieved about their rights.

Here is a more complete statement from Lottoland at iGamingBusiness.com:

Lottoland is disputing the ACMA’s decision, and has launched legal proceedings.

“We have decided to challenge ACMA in the Supreme Court because we believe their view on jackpot betting is wrong,” Lottoland Australia chief executive Luke Brill said in a statement issued to iGamingBusiness.com.

“Lottoland’s jackpot betting products have been approved by the relevant licensing authorities, and we believe they are fully compliant with Australian law.

“We have worked hard to adapt to recent changes to the law, and we are committed to providing exciting new products that our customers love,” he explained. “By taking this stand against ACMA, we are fighting for the rights of hundreds of thousands of Australians who enjoy the occasional flutter. We are fighting for freedom of choice.”

It will be interesting to see how this plays out. I suspect the issue has a long way to go yet given the stakes and the apparent resources  of the international Lottoland business.

Remember, Lottoland launched in Australia mocking newsagents, denigrating our channel, those who worked in it and even some who shopped with us.

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Ethics

ACMA finds Lottoland in breach of the Interactive Gambling Act

AMCA, The Australian Communications and Media Authority, released this today:

ACMA finds Lottoland in breach of the Interactive Gambling Act

An Australian Communications and Media Authority (ACMA) investigation has found that Lottoland Australia Pty Ltd has breached the Interactive Gambling Act 2001 (the Act) by providing prohibited interactive gambling services.

The ACMA investigation found that several Lottoland online jackpot betting services were games of chance which are prohibited under the Act.

These included the Mon & Wed Jackpot, Tue Jackpot, Thu Jackpot, US Millions, and US Power jackpot betting services.

Lottoland disputes the ACMA’s findings and has commenced legal proceedings.

Lottoland’s service, Daily Millions, was not found to breach the Act.

The ACMA will not be making further comment while legal proceedings are on foot.

I am grateful to Ash Long from the Melbourne Observer, and friend of newsagents, for sharing this.

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Lotteries

How would you fare in a FairWork review of your business?

FairWork is targeting several business channels to inspect employee records and employment terms. How any business fares will depend on how the business is run. The requirements on business owners are simple:

  1. Pay at least the aware rate this includes family members who are not documented shareholders in the business.
  2. Pay for all hours worked, including trial hours.
  3. Provide at no cost any required uniform.
  4. Have a structured roster and provide this in advance.
  5. Have a clear statement of duties.
  6. Provide a payslip with every pay.
  7. Pay on time.
  8. Pay super on time.
  9. Maintain work cover (or equivalent).
  10. Maintain proper records of compliance of the above.
  11. Maintain a policies document should you plan to rely on failure to follow a policy at some point in the future.
  12. Have a process employees can follow should they have any concerns or wish to raise a dispute.
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Newsagency management

WA Government announcement for Lotterywest retailers

The WA Premier made an announcement today of initiatives supporting lottery retailers.

  • Retailer commissions on Lotterywest sales to increase by 10.8 per cent from December

  • Lotterywest to roll out package of initiatives to boost sales and create long-term retailer sustainability for small businesses

  • New initiatives will ensure Lotterywest can continue to support WA community through grants program, which delivered $260 million back to the community in 2017-18

Premier Mark McGowan today announced that retailer commissions on Lotterywest sales will increase by 10.8 per cent from December this year, helping small businesses.

This will increase the total gross commission for retailers from nine per cent to 10 per cent, which is a 10.8 per cent increase overall, ensuring Lotterywest continues to pay the highest retailer commission in Australia.

The increase will form part of a package of initiatives designed to boost sales of Lotterywest products, ensuring long-term retailer sustainability and a strong return for the Western Australian community through Lotterywest grants.

Here is the email sent to Lotterywest retailers:

Dear

Today the McGowan Government announced that we are developing a package of initiatives to support retailers.

This includes an increase in gross retailer commissions from 9% to 10% for most games (excluding Cash 3, Super66 and Scratch’n’Win) which will come into effect from December 2019.

As a Lotterywest retailer, you are important to our business success and we are committed to assisting you where we can in these challenging economic times.

Over the coming months we will engage with you and other key stakeholders on the shared issue of sustainability, to work out what these initiatives will look like and seek feedback.

For more information, please read the full media statement. I have also included the Premier’s personal letter you received yesterday.

Your Retailer Relationship Officer is available to answer any questions you have. You can also contact our Customer Services team on 133 777 or contact@lotterywest.wa.gov.au.

This is a significant project for Lotterywest and we look forward to working together to build a sustainable retail network, so we can continue a strong return for the
WA community.

Kind regards

Susan Hunt PSM
CEO Lotterywest and Healthway

Questions and Answers

What is the new commission rate going to be?
The new gross commission will be 10% for all games excluding Cash 3, Super66
and Scratch’n’Win because these are inclusive of commission.

When will we find out more about the initiatives?
We will send you an information pack detailing these initiatives over the coming weeks.

Will there be a price rise and what should I tell my customers?
There will be a price rise from December 2019. Further information will be provided closer to this date, which will include what you need to tell customers and when.

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Lotteries

The loss making model of newspapers in retail newsagencies

News Corp earlier this week announced it’s latest commission rate for retail newsagents.

Making barely 12% of any product in retail today is nuts. While the year on year increase is 5%, it’s off a low low base and reinforces a fee that is below award rate level, below poverty line level.

An average suburban newsagency will sell, say, fifty papers Monday to Friday. That delivers $10.79 ex GST in margin. Out of that, the store has to fund labour, rent and other business costs. Selling fifty newspapers will take around twenty minutes. Twenty minutes will cost around $6.93 in labour costs. The space taken by papers will cost around $10.95.

Based on these two numbers alone, fifty newspapers sold a day provide a loss for the business. Add to this the labour cost of receiving inventory and managing returns, covering the cost of theft and dealing with other costs associated with newspapers.

This is the problem with newspapers in a retail newsagency today. The numbers do not work.

Some publisher reps say that the traffic generated is beneficial elsewhere in the business. There is no evidence in sales basket data to support this opinion.

No wonder some newsagents are quitting the category.

What would I like to see newspaper publishers do? Simple, be respectful with margin. Double it immediately as a start. This would encourage newsagent engagement. I am confident it would lift sales. This would serve publishers well.

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newsagency of the future
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