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

Business outlook for Ovato (Gotch)

Click here to access an investor presentation fro Ovato, released yesterday. Ovato shares were halted from trading pending the announcement of a share entitlement offer.

As you can see from the half year report and their share price over the last year, it has been a tough time:

Here is a page from the investor presentation that may interest newsagents – not the magazine forecast:

With magazine sales declining, cover prices at five (and more) year ago prices and with GP fixed at 25%, this category is problematic for newsagents.

No wonder….

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magazine distribution

The City of San Francisco bans cashless stores

San Francisco last week moved to ban cashless stores. This is a big news story receiving plenty of coverage, like this from CBS:

San Francisco is about to require brick-and-mortar stores to take cash as payment, joining Philadelphia and New Jersey in banning an increasingly popular store policy of snubbing cash. Critics say refusing cash payments harms low-income people and the homeless, who are less likely to have access to credit cards.

And this TV news report:

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retail

If you have Grumpy Cat product…

Grumpy Cat has died. This cat that spawned a worldwide business has lead a celebratory life. Grumpy Cat achieved terrific success in Australia.

If you have Grumpy Cat products, pitch them where they will be seen. Do it respectfully. Interest will be strong I suspect.

If you don’t have Grumpy Cat products but ant to acknowledge the cat’s passing, the image I have included with this post is the official announcement that was shared on social media. Consider sharing this.

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Gifts

Vale Bob Hawke

Today is a good day to place newspapers with Bob Hawke on the cover at the counter. You will sell more for sure. Today’s paper will be bought by plenty who would otherwise not buy a paper – if you make it easy for them.

Regardless of your politics, it is hard to not wish for a leader like Hawke, he preferred consensus, has a commitment to social justice, did not tolerate racism and steered in great reforms, like universal health care and a significant increase in education engagement.



 

All the pics are from Twitter.

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Newspapers

Do we need to see old magazine titles retired?

In the online world of e-commerce sites, information sited, podcasts and community forums, it is common to see major rebrands and replacements of old with new.

Fresh is in online. Thanks to excellent and deep engagement data, decisions are made based on evidence. hence the replacement of brands with new.

Looking at the magazine shelves, I think we could do with a bit of this. There are some tired titles that are not viable for newsagents at a GP of 25% of cover price that is not keeping up with CPI.

Newsagents think about these things when looking at space allocation for the category.

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magazines

Discount Mother’s Day cards

Maybe I missed it before but it feels like the extent of low-price Mother’s Day cards in supermarkets is bigger than before. This photo from a Woolworths supermarket shows only part of their low-priced Mother’s Day cards. It was better located than the more expensive cards.

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Greeting Cards

Valuable inventory management mantra for retail newsagents

Never let an item of inventory have a birthday in your business.

This is excellent advice. It is easy to track and easy to manage.

I did some work for a newsagent last year and in stationery alone they had $37,000 worth of inventory items that had not sold in six months and $13,000 of items that had not sold in over a year. That is, not any of the stock of any of the items had sold in the period.

Acting on this starts with tracking it. It is dead set easy. Track it. Identify the dead stock. Quit it. Don’t replace it.

Dead stock is an opportunity cost to the business. It weighs you down and causes you to offer a sub-par shopping experience.

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Newsagency management

Free flu shots for staff

We offered free flu shots at my office last year through a service we paid for to visit and deliver the shots. This year, we have taken a different approach, to enable people outside of the head office to engage.

This year, we are refunding the $20.00 cost of people getting a flu shot from their GP or local pharmacy. There is a GP near the office offering the $20.00 service.

We announced it last week and the response has been terrific.

Our experience last year was a reduction in downtime as a result of flu in the workplace.

I mention it today as offering the refund is a relatively low cost opportunity for employers to provide an unexpected level of care for team members. It can be a small but useful differentiator in making the workplace more appealing.

This matters in small businesses where hiring people can be a challenge. I know of plenty of businesses where they are looking for ways to compete for staff with other local businesses.

The Health Direct website, from the federal department of health, has excellent advice on flu shots.

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Social responsibility

Is Woolworths getting out of magazines?

A couple of people mentioned to me they heard a rumour Woolworths was getting out of magazines. I checked several Woolworths stores, including George St Sydney, and while their magazine offer is patchy (at best)  there is no evidence of them exiting yet.

What does appear to be the case in Coles and Woolworths is a reduction in magazine pockets at or near registers. This location was high value of impulse purchases of magazines. The retreat from the large number of pockets that used to be at registers must have impacted magazine sales in supermarkets.

I suspect supermarkets will be a space to watch in terms of magazines over the rest of 2019.

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magazines

Newspaper front page cover-up

2019 has seen a significant increase in replacement of the entire front page of some newspapers in Australia with ads. What used to be a rare replacement of front page news with a full wrap-around is more common now in my experience. While we will never know, I’d love to know the impact on sales.

On Saturdays years ago, customers would empty the papers of their catalogues and flyers. I have seen customers recently remove the ad wraparound and leave it at the counter or, worse, throw it on the ground in the street.

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Newspapers

Mother’s Day day is here

As is often the case with Mother’s Day and Father’s Day, the real success of the day for many retailers is the Saturday before. Today is that day.

Good luck everyone. I hope the day is a terrific success for the business.

Today, as through the season, we have gifts and cards in several locations, to connect with the different destination shoppers we serve.

We have very little in the way of Mother’s Day specific gifts. In fact, that’s been our approach for years. We think mums are tired of cupboards of Best Mum Ever mugs.

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newsagency marketing

News Corp and tax

The AFR today has a story some may find interesting.

Is News Corp still paying zero tax?

News Corp did a little tax engineering just days before the election campaign started.

It’s always inspiring to see someone backing themselves, and Rupert Murdoch is putting his money where his mouth is when it comes to News Corp Australia.

On March 29 News Corp US ponied up $178 million to invest as new shares in News Australia Holdings. Apparently the $4.3 billion of existing capital was completely inadequate.

….

So how much tax does News Corp Australia pay?

Looking at cashflow, in 2018 NAH made $162 million in cash payments for tax. But that includes REA Group, its 61.6 per cent subsidiary, which paid three-quarters, or $124 million, of that.

It also includes News Corp’s 65 per cent owned NXE Australia, which owns Foxtel and Fox Sports Australia and paid $10.4 million cash tax.

News media outlets have a social responsibility to be good citizens, which includes paying their fair contribution of tax – an not managing affairs to shift untaxed income offshore, in my opinion.

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Social responsibility

Accountants don’t always provide good advice when it comes to POS software for small business retailers

A newsagent told me this week that their accountant told them they should be using a particular software product to run their newsagency business. The software the accountant recommended has not beed made for newsagency businesses. It does not connect with any suppliers. It is not made in Australia nor is it supported in Australia.

The advice from the accountant was dangerous as had the newsagent followed it they would have disconnected their business from functions that are key to them.

I hear this too often, accountants providing software selection advice. Most accountants are not retailers, most have no understanding of workflow, data connection and other requirements specific to specialty retail channels. This is why I suggest to specialty retailers, like newsagents, that they do not rely on their accountant for software selection advice.

The accounting providing the advice to which I refer in this post uses accounting practice specific software to serve the specialty needs of their business. So, it is good enough for them to choose software tailored for their needs but not good enough for their clients to select software tailored for their needs.

Yes, I own a POS software company. However, I am not saying here choose Tower Systems. rather, I am saying to any specialty retailer, to jewellers, toy shop owners, butchers, bike shop owners, newsagents, pet store owners, garden centre owners, produce store owners, fishing store owners, homewares business owners and more – choose software that is fit for purpose, software designed for your type of business. Do your own homework. Make an informed decision.

Rarely will an external accountant have the practical experience with your specific type of business to provide good advice specific to your business needs, beyond accounting system interface needs.

By all means, rely on your accountant for accounting software advice like Xero versus MYOB, as that is in their wheelhouse. Given that smart POS software seamlessly links with Xero, MYOB and Quicken, the newsagency software you run or the specialty retail management software other specialty retailers run is best left to the experts in your business.

The easiest software Tower Systems can sell against is the generic POS software sold to a specialty channel retailer because once the retailer sees facilities that serve their needs the decision is easier. For newsagents, that is connections that serve in managing magazines, newspapers, meeting cards, stationery and more.

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Newsagency management

Terrific Mother’s Day campaign

The Hilton Hotel is Sydney has this wall for messages people can leave about / for their mums. It is part of  an awareness and fundraising campaign for the Mother’s Day Classic, an event in support of Breast cancer research. This display is setup in the foyer of the hotel.

What I like about is that it is complete. There is the large wall onto which people fix their messages. There is the poster explaining it. And, there are the materials for participation. They make it ease to engage.

This complete approach is worth remembering when running similar shopper engagement opportunities in our businesses – making it easy for shoppers to engage and thereby leveraging the benefit opportunity for the business.

Creating a wall of remembrance and thanks for mums has been on my list of Mother’s Day marketing tips for newsagents for years. How they have executed it at the Hilton is inspiring.

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marketing

Federal election comment: politicians should be required to spend a week working in a local small business

I first wrote here in 2013 that State and federal politicians should be required to undertake a week of genuine paid work experience in a small business every year. I believe it today more than ever.

Right now in Australia, during this 2019 election campaign where small business barely rates a mention,  this idea ought to be put to every politician from all parties. While they are happy to visit small businesses, have their photo taken, shake some hands and move on to the next photo op. Each visit is stage managed to show them engaged with small business. Yet, they are not engaged.

Politicians who really want to engage with small business will seriously consider this proposal. Sadly, that means none will, from any side will.

Here is my proposal from 2013:

Despite small businesses employing more Australians than any other business block we receive less attention from our politicians. This is in part our own fault driven by disconnected representation and a lack of unity on issues.

One way to redress the disconnect between small business and politicians would be to require every politician, federal and state, to spend a week a year working in a  small business in their electorate – paid real work.

The business should be chosen by random ballot – to remove the opportunity for mates looking after mates.

Besides the practical work experience, the politicians would gain a better understanding of the life and challenges of everyday Australians.

I am confident that after a couple of years we would see this small business work experience program drive a more practical narrative from politicians of all sides- and not just a small business focused narrative but one also more connected with real life.

We can’t compete with the lobbyists who are paid a fortune to guide our politicians to outcomes they want. Hence my call for a legislated week of small business work every year for every politician.

Imagine what discussions about paid parental leave, GST changes, assistance for the car industry or workplace relations changes would be like in the cabinet room if everyone at the table had done a week of real work in a small business beforehand. They would have reference points relevant not only to our small businesses but also to our employee colleagues, their constituents.

Thinking about this further today, I am confident enforcing a week a year working in a small business in their electorate chosen at random would result in better government not only for small business owners but for all these small businesses serve for it would add to the experiences of the politicians and change their conversations.

For the record: This post has been written and authorised by Mark Fletcher, Richmond, Victoria.

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Newsagency management

Why I am optimistic about indie retail in Australia

I was interviewed last week about indie small business retail in Australia and, in particular, why I am optimistic about the future. I have thought about this a lot as it is a topic prospective retailers often want to discuss.

From a headline perspective, people are not spending less, which is good. The trajectory is good. And while there is debate about what of this spending will be online versus the high street, retail is retail and as long as spending increases, retail businesses will benefit.

Thinking about high street retail. though, I am optimistic for engaged retailers, retailers embracing change, retailers not bound by their four walls.

There is no doubt that we are in a period of significant change. We have the disruption of online, disruption of completely new business models, banking challenges pushing cashless, about costs that force a rethink on shop floor engagement, overcrowding in terms of retail space per capita and more. Change surrounds us.

In this change, when you bundle it all together, is opportunity to explore the business considerably outside its usual four walls and it is in this consideration that I find a key opportunity for optimism.

For when we break free from the expectations of our traditional shingle is when we can find new shoppers and a fresh financial model for our retail businesses that can provide better results and they, in turn, encourage further change.

Change is good. Change drives innovation. innovation is key to better business results.

While there will be collateral damage through the change, those that remain confront wonderful opportunity.

For me, the extent of change is a key cause for optimism because I take change as the opportunity for major change and I’ll back myself as to results from this.

My advice to newsagents is to spend less time of what is traditional for your business and more time playing way outside traditions.

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Newsagency management

The immediate asset write off benefit for newsagents investing in their businesses

The immediate asset write off benefits that have been further enhanced this year present newsagents investing capital in their businesses tax and other benefits that are worth considering.

The details of what we in small businesses can do are outlined in the simpler depreciation for small businesses information from the Australian Taxation Office:

Right now, the threshold is $30,000. Spend this much on a depreciating asset and you can write it off this financial year. If your business books a profit, the benefit of the write-off can be considerable.

The Tax Office website has excellent details. Your accountant can help too.

The Small Business Development Corporation in Western Australia has an excellent explainer of instant asset write off on their website. Click here to access it.

Click here to access an explainer from Finstro, a business finance company.

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Newsagency management

Warm socks a hit for Mother’s Day

We are having terrific success with these unique warm fleecy socks for Mother’s Day. They’re sourced out of Canada.

They sell easily once you get shoppers to put their hand deep into a sock, to feel the soft comfort and enjoy the warmth.

This tactile approach to the product pitch, even at the counter where they are easily purchased on impulse by people looking for a different quality Mother’s Day product.

The beauty of the pitch is having cards available and a bag to make the whole Mother’s day purchase occasion handles in a minute or so. Plenty gf guys love that we make it easy for them.

Mother’s Day can be competitive in families. Mums can only use so many World’s best Mum mugs. We have found staying away from that cliche product to be beneficial.

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newsagency marketing

It’s first communion season

This is a valuable, local and family-oriented season with which newsagents can easily and perfectly connect – without coming across as being too commercial. It’s a good fit for our channel.

Cards, gifts, crosses, photo frames and rosary beads are some of the items that work well.

Basket data analysis shows a typical basket of items can easily pass $50.00 in some communities.

On social media, this season is an opportunity to share respect for the traditions of the season while at the same time representing that your business can help families celebrate the occasion.

Newsagents in marketing groups should already have the right product and collateral for easy and branded marketing.

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newsagency marketing
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