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

Bauer CEO says the publisher is not in trouble

From Mumbrella a couple of days ago:

Bauer Media’s new CEO Paul Dykzeul doesn’t care if people think he’s a “prick”. Instead, he says he’s passionate, knows what he is doing, and is here to change the business model.

The former Bauer New Zealand CEO, who joined the Australian arm in late June after the abrupt departure of Nick Chan, tells Mumbrella he hasn’t come to Australia to “manage the status quo”, but instead intends to implement change and “future-proof” the business.

“This business is not in trouble, it’s just having some difficulties, and this is an adjustment process, and it’s going to make the business a hell of a lot better as a result of the adjustments we are making,” he says.

The comments follow Bauer Media’s first major changes under the new CEO last Friday – which included a reshuffle to the publisher’s executive line-up and the closure of custom publishing arm, BauerWorks.

It came the same week Bauer Media was told to pay Australian celebrity Rebel Wilson $4.5m in damages, and German executive and interim CEO prior to Chan, Andreas Schoo left the business.

While Dykzeul admits Friday’s announcement – which sees the removal of two publishers and the promotion of Fiorella di Santo – would lead to some redundancies, making the business more “viable long term” is his focus.

“I’m not here to manage the status quo, I’m here to change things, and that’s what I’ve been pretty successful at over the years and that’s why I am here,” he says.

“I don’t care what people say about me, I know what I’m doing, I know what I want to do, I am very passionate about it, and I’m very single-minded about it.

Click on the link to read more, including about the departure of the well known to newsagents 17 year Bauer (and ACP) veteran Eugene Varricchio.

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magazines

Games a fast growing category in Australia

The games category has achieved double-digit growth on the back of strong numbers in toy, newsagency and game focussed businesses. Stores well established in the games space are doing particularly well this year.

The two key drivers of the growth in the national and international sales data I have seen are game extensions through additional licences for well-known games and a resurgence of interest in game playing. The second point is particularly interesting with younger players drawn to games in good numbers.

If you are not in the games space and are looking to leverage the engagement required dedicated floor space, good product knowledge, current product access and a fresh approach to merchants rising. In other words, don’t put products on the shelf and expect it to sell. Authentic engagement is key – you cannot fudge your engagement.

By authentic engagement, I mean engagement in-store and on social media. The best games customers will purchase from stores that respect them. respect is shown by actual interaction with the products.

Licenced products provide another avenue here too. Take Game of Thrones. There are multiple games and related products you can offer that tell a strong Game of Thrones licence story. You can pitch these such that the GoT fan, of the person purchasing for them, could purchase multiple items from the one licence.

Games as a category requires more work than many other categories. This work pays off if you invest. Games could shut at around 25% of toys where toys could be equal to close to 100% of card revenue based on benchmark data I have seen. While not always the case, these numbers can be useful to those assessing whether to get into the games space.

If you are not established in games today and think it could be for you, look carefully at nearby competitors. if you are in a marketing group, leverage their knowledge as they should give you access to deals, marketing and more that helps you get into the space more easily.

The ideal games shopper is committed to the category. They purchase multiple games a year and the bring others into their enjoyment of games, growing the customer community. This is where local shops can do particularly well.

I am committed to games in my business. This is why I look carefully at the data I have access to as the insights help propel sales success.

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Newsagency management

GNS issues statement on levies paid by newsagents

The GNS Chair this afternoon issued a statement to newsagents regarding the levy collected by the business as a premium on top of purchases.

Dear GNS Levyholder,

As you are aware for many years GNS charged its customers a levy to provide working capital for the group.

The levy impost was ended last year on the basis that the company was now mature enough to generate its own working capital and to make prices for you, our customers as low as possible.

So while the levy was no longer charged from last year, GNS has a present balance of $7.8m of those levies.

Since April this year, your levy balance has been provided on your monthly statement, so you are aware of the amount of your levy.

From time to time, customers have requested access to their levies and we have been endeavouring to find a way without endangering the company’s cash flow and working capital needs.

So in the next two months, provided ASIC clears it, an offer will go Levyholders to take up half their levy in GNS shares and the other half as trading credit.

All the details will be sent in October.

Yours faithfully,

Martin Hartcher
Chairman GNS Ltd

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Newsagency management

Choose social media images carefully

This painting of a cat is on a card form Hallmark. I have more success with this photo on social media than a photo of the whole card. People like cats, and dogs (I guess). If they see a nice image of a cat they may pause. That is the first step to achieving engagement with on social. Try it. Your card department should have opportunities like this.

Oh, and this is up to you and not your card supplier.

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Greeting Cards

Is Lottoland advertising misleading?

While I am no lawyer, I do wonder if this ad from Lottoland that appeared on Facebook last week is false or misleading.

A lottery jackpot is a win based on the accumulation of first division prizes that have not been won from what I understand. Is this $100M that? I don’t think so, unless I am missing something.

In the ad text they say Bet on OzLotto Online. My understanding of Lottoland is that you are n to betting on OzLotto. rather, you are betting on the numbers that are drawn for OzLotto.

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Competition

Learning from supermarkets

Supermarkets are educational places because there we get to see in-store execution by retail experts. Take the placement of SIM packs and phone recharge product with magazines. They do this for a reason. Sure, Optus would have agitated, probably paid, but it is done because it works for the supermarket.

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Newsagency management

Pitching New Idea Sugar Free

We have been pitching the New Idea You Won’t Believe It’s Sugar Free cookbook with newspapers in the last week as it is a title that is easily purchased on impulse. I figured newspaper customers are good candidates as they should be well-informed about sugar.

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magazines

Management tip: backup your whole system

It is not enough to backup trading data from your computer system. No, not need to backup everything on which you may rely on all computers in your business.

A retailer recently lost their hard disk drive and only had a backup of the data managed by their POS software. They lost everything else.

With professional cloud backup it is easy to ensure all data is backed up. Do it.

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Management tip

Marketing tip: smart use of social media

The folks at Tims garden Centre in Campbelltown use social media well to connect with the local area and to compete with big retailers. This post from them showing off the performance of their potting mix compared to that from a big retailer is a perfect use of social media. They market by showing. The evidence speaks for itself in terms of the superior products they sell and in terms of people who engage with their Facebook page.

Social media posts need to entertain, inspire and / or help people feel good. What they do at Tim’s Garden Centre is ideal.

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marketing

Interesting puzzle title

The folks at Lovatts have launched, with little fanfare, a new puzzle title, Audrey Daybook. We have placed it with fashion as well as crossword titles. Plus, we have written about it on social media, to explain with it is.

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crosswords

1,474 words from Universal Magazines pitching a calendar

I have complaints from newsagents about Universal Magazines emailing them with a 1,474 word pitch for the Johnathan Thurston Immortal Queenslander Calendar 2018. The length of the email is the core concern – it is a single blob of text that most in small business retail do not have the time to read.

The calendar offer itself is not competitive, based on what we can get elsewhere.

While the title is unique, is it unique enough and the GP$ sufficient to read 1,474 words and risk your capital on? I suspect not.

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Calendars

The lottery challenge is bigger than Lottoland

While there is, finally, some action calling out Lottoland, there are newsagents who are not aware of other competitors, some of whom operate in the same way as Lottoland. Take a look at these competitors.

William Hill is like Lottoland.

News is yet to launch but is already getting plenty of attention in gaming circles.

Crownlotto, the name says it all.

Magpie Millions pitches as a community service, but it is a numbers based lottery. It operates under licence from the NT government.

And as a reminder, here is Lottoland:

What are you doing about this? All these lottery / betting products are chasing the customers on which retail, over the counter, lottery businesses rely.

While there has been some focus on Lottoland, their community contribution, the taxes paid and more, the challenge to newsagents and other lottery retailers is bigger than just Lottoland.

I have been aware of this suite of competitors for some time and have discussed them within my own circles when contemplating competitive strategy.

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Competition

The $2,370.00 transaction in the newsagency

What we can sell in our businesses, no matter whether we identify as a newsagency or a business that has transitioned from much of the tradition of that shingle, is limited only by our ability and imagination.

One newsagent had a single sale worth $2,370 Monday morning this week.

The same customer has since spent another $2,500 with the business.

The sales success is a testament to the business owners and their actions stepping outside hat has been usual for the channel, ensuring the business has the right products to facilitate sales this size and backing the products with the right in-store and out of store pitches to drive success.

This success on Monday is not isolated for this business. While the quantum a single sale is somewhat rare, single sales at above $1,000 are not.

This business is constructed for such success.

Buying, merchandise rising, marketing and shop floor engagement are all structured to achieve sales like this.

My experience is any newsagent has the capacity to achieve success like this.

To those who don’t believe the story – that’s okay, I don’t need you to believe it.

To those who think they can; pt achieve this – I say believe in yourself, team with those who can support you to achieve there.

To those who want to talk this down – go somewhere else to make people feel down like you.

This is a good story, to celebrate. A business identifying as a newsagency did this. It shows what is possible and for that we should celebrate.

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Newsagency management

GNS statement to shareholders

GNS yesterday issued a statement to shareholders:

Dear Shareholder,

I just wanted to report on progress at GNS.

As you know without Cash & Carry, our warehouse needs are considerably reduced. Recognising that we have just sold our Melbourne warehouse (10,000 sqm) and will be moving to a new modern facility (of 3,900 sqm). Similarly, we will be moving out of our Sydney warehouse at Padstow to a smaller modern warehouse with the timing yet to be finalised.

The 16/17 year just finished was – as you are aware – a very tough year. While we were still in profit we had to sell Padstow and refinance the business. Our service levels have now been restored and our inventory is now under much tighter control. As part of the more disciplined approach to stock levels we have had to recognise overstocking and took a $2m stock writedown. Unfortunately this resulted in a drop in share price, such price will be finalised shortly as our auditors complete their work.

As the start of rewarding our patient shareholders we have declared a dividend – GNS’ first – of 9% of paid up capital. The record date for payment is 2 December 2017.

Also from time to time, customers have requested access to their levies and we have been endeavouring to find a way without endangering the company’s cashflow and working capital needs. So in the next two months, provided ASIC clears it, an offer will go levyholders to take up half their levy in GNS shares and the other half as trading credit.

Last year GNS made two acquisitions – WA Stationers and V Wholesale and we continue to consider market opportunities to build a greater resilience for the business.

Our new senior management team has settled in well, recognising the changes that were needed and implementing solutions. It has also signalled a return to state based management and customer focus.

And to cap off a period of very considerable change, we will be presenting a number of Constitutional changes to shareholders at our 2017 Annual General Meeting. These changes being recommended will be detailed in the AGM papers but aim to recognise the changed market environment, freeing up outdated ownership restrictions.

Thank you for your patience and loyalty as we reassert our place in the market.

Yours faithfully,

Martin Hartcher
Chairman
GNS Ltd

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Newsagency management

newsXpress seeks out new shoppers with unique t-shirt product

Newsagency marketing group newsXpress last week launched Chalk-Apella t-shirts through its retail locations.

Sourced direct from the product creator at an international gift fair months ago, newsXpress is helping members launch the products in-store with stunning displays, a professional (A1 printed both sides) poster and a locally made marketing video.

newsXpress sourced the t-shirts direct from the supplier. It has managed the launch inn Australia: providing marketing posters, producing videos, creating best-practice displays and supporting the launch with a massive social media campaign and backing it all with a terrific website.

Here is an in-house produced video launching the product:

Here are a three of the in-store displays:

Here is newsXpress collateral provided in digital and A1 format for in-store use:

The reasons for sharing this are to show the launch of a product that is different to what you might expect to see in a business from the newsagency channel and to show how the new product is being launched in-store.

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Management tip

Here is something any newsagent can do to increase card sales

Put cards where people are most likely to purchase them.

While that sounds like common sense, many newsagencies are not structured or built for this approach.

Historically, newsagency businesses have been established with a card department created on the belief that anyone wanting to buy a card will enter the shop and look there. And they do, in good number.

However, cards only in the card department misses the opportunity to win impulse purchase business.

With many more types of retailers selling cards today compared to just a few years ago, we need to get better at tapping into the impulse purchase opportunity. Hence my advice:

Put cards where people are most likely to purchase them.

This means putting cards with gifts, in multiple locations in-store, and doing this with the careful thought of an editor making considered style decisions. It also means reviewing the placements every couple of days, to ensure they remain what you want.

Adjacencies matter with the type of card placement I am outlining here – the right products with the right cards. The goal is to sell both, oh, and a bag too.

Almost every department in a newsagency can support thoughtful card placement. But not all at once as that defeats the purpose of shining a light on cards.

There are obvious choices like baby cards with baby gifts, like in the photo with this post. Teacher cards with teacher gifts, male birthday cards with male birthday gifts.

But what about a display of gifts with sympathy cards, new home cards or thank you cards. In these three we have opportunities to source gifts to support the placement of a selection of cards from each caption outside the gift department.

Growing card sales in the newsagency can be achieved if we engage with cards in ways that have not been common for us. This suggestion of thoughtful placement of a small selection with gifts and other items is tactic way I am sure can help grow card sales.

Note to card companies: don’t tell retailers what cards to place where. Let them make those decisions in-store. By all means support with space efficient stands that are not made noisy with branding. However, retailers haver to make editorial decisions themselves.

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Greeting Cards

Newsagency mareting tip: preference suppliers who promote you

Before you take on a new supplier, ask them what they will do to help drive shoppers to your business. Specifically, ask if they have a link on their website to their stockists and whether they would add you to the link.

If there is no link then the relationship will not be as valuable as it may be – especially if the brand is well known and sought after.

The more suppliers linking to your business the better.

In terms of existing suppliers, check out how they promote small business retailers compared to big business. If they favour the latter over you, have a conversation with them.

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Management tip

Free newspapers home delivered for 6 weeks through UK campaign

An interesting campaign developed by News UK has been released online pitched six weeks of free newspapers home delivered with local newsagents undertaking fulfilment. The papers are free. The customer pays the newsagent the usual delivery fee.

The website is worth reading as it provides several insights that I think distribution agents in Australia would find interesting. The information provided is useful and the way it is organised is excellent, simple to follow and offering go to points if someone reading the site needs more help.

This initiative is good because of its focus on what is a core, sometimes only, business for newsagents.

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newspaper home delivery
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