With the recent introduction of Lottoland into the Australian Market a major change, as Australian Punters are now able to play overseas lotteries legally except maybe in South Australia.

Lottoland is off to a fine beginning. It just started here a week ago, and it was reported in Australia that it sold over 200,000 tickets, then saw its website crashed, after 107,000 Australians signed-up to the site and overwhelmed its servers.

Now an Australian punter can decide to go for a $70 million powerball or they can try their luck on many other overseas lottery products like, for example, a $US1.5 billion (A$2.2 billion) Powerball draw in the US or a EuroMillions, which had a prize €183.5 million which is in cash. The other issue is that many powerballs overseas have much lower fees. Australian Punter may be tempted with overseas powerballs with better odds.

Possibly the state governments will stop it as they do not want to lose the revenue they get from lotteries. Maybe the Australian Punter will reject Lottoland as they declined a similar offer from Betfair, but I think a better solution would be for powerball in Australia to merge into powerball in the US. I know Australian retailers would love to get some of the traffic that powerball in the US generated. The other possibility is that powerball could duplicate what Lottoland is doing, in that technically when you buy from Lottoland you do not buy a ticket, but a guarantee that they will pay out the equivalent prize money, as if you had a ticket.

As I stated there may be major changes in the lottery system here.

Although I cannot go into the details here, over the last few months, we have been involved in an investigation on overcharging of a seller of telco and some other products. The figure lost is estimated in the last audit is 7087 products, worth about $191,000.

In the process of the investigations our programmers have identified a major security hole in the processing of telco products. If you consider that one average seller could lose $191,000 you get an idea of potentially how big a problem it could be.

Lucky for this seller they had our point-of-sale system which has a comprehensive telco card historical recording facilities. As such we could verify all of our clients' claims. However I am sure many resellers of telco products would not be so lucky and the money is lost.

The investigation now seems to have gone south so much so that I blasted the investigator as incompetent. So currently the investigator refuses to talk to me. Like I told him, my client comes first, and I do not believe you are looking after their interests.

What can be done?

• The invoices and statements from the telco suppliers need to be checked?
• Balance them with what your End of Day slips show.
• Then randomly check many of the statements to see if the dates, quantities, the arithmetic and the products are correct.

If this had been done in this store about $191,000 would have been saved.

This morning Network Service announced that they would move all their retail distribution activities to Gordon and Gotch. As our systems can handle what will be much bigger return forms, but clearly it will be a major problem for some larger magazine retailers who do not use our system.

We are all now discussing the situation on how to best manage this changeover. Obviously, many patches will need to be made to automatically update your magazines to handle the new codes and return details, they are going to be big ones. We are going to have magazines delivered by Network that need to be updated before they can be returned to Gordan and Gotch.

Of course, it is still in the early in the process so how all of this is going to happen is yet to be fully discussed and decided. More details will be released closer to the transition dates.

Here are some relevant links that VANA have released, the one by Bauer I have highlighted as I think it is a must-read.

Network Services announcement

Gordon and Gotch announcement

Bauer Media FAQ

Gordon and Gotch FAQ

We had three magazine distribution service, then we had two and now we have one.

{All links were removed}

The Magazine Publishers of Australia selected the following company Boston Analytics to provide an independent and robust evaluation on their pilot magazine tests to the ACCC. The public release of this report by is expected in a few days see here.

We have worked closely with Boston Analytics, to help them, however we were not given the data, we requested to do our study what we could do the analytics for our clients. So although we have fewer shops to compare then Boston Analytics, we do feel we had access to more non magazine shop data, plus we used a longer and more extensive shop history, and we think our data mining analytic tools are better.

Data mining (smart software) is something only Pos Solutions retailers have in our market space. If someone in our market space disagrees with this statement, show me your shop reports with it absolute, square, R squared, correlations, squashed, interquartile, etc. errors all documented for equation generations, etc. Data mining in retail is a field that we consider ourselves, a market leader.

With our data mining, we compared magazine sales by unit price, number and profit over five(5) years with every factor we could think of and ended out with the following list of factors to study.

Trial of magazine, Plain packing of tobacco, Hidding the tobacco, Julian date, Summer, Autumn, Winter, Spring, Monday, Tuesday, Wednesday, Thursday, Friday, Saturday, Sunday, Payout_number, Payout_unit, Payout_profit, Others_number, Others_unit, Others_profit, Card_number, Card_unit, Card_profit, Delivery_number, Delivery_unit, Delivery_profit, Drink_number, Drink_unit, Drink_profit, Eftpos_number, Eftpos_unit, Eftpos_profit, Fax_number, Fax_unit, Fax_profit, Gift_number, Gift_unit, Gift_profit, Instantpay_number, Instantpay_unit, Instantpay_profit, Instant_number, instant_unit, Instant_profit, Lollies_number, Lollies_unit, Lollies_profit, Lotto_number, Lotto_unit, Lottopay_number, Lottopay_unit, Lottopay_profit, Misc_number, Misc_unit, Misc_profit, Paper_number, Paper_unit, Paper_profit, Phonecard_number, Phone_unit, Phonecard_profit, Photocopy_number, Photocopy_unit, Photocopy_profit, Stationery_number, Stationery_unit, Stationery_profit, Tobacco_number, Tobacco_unit and Tobacco_profit

I then did almost eight(8) million calculations in our data mining and over 500 billion evaluations on each of the stores, I checked. I know it's a lot of work which is why few do it.

Factors that were shown to be important in magazine profitability were days of the week, card sales, the amount and number of instant pay outs as people who win in often buy magazines, newspaper sales, drink sales as people that are thirsty come into the shop to get a cold drink and while they do this sometimes buy more and phone card sales for similar reasons as drinks.

However, my conclusion is that the trials had no effect on magazine sales.

This conclusion is not surprising to me as from the sales view it made no difference if the non sellable magazines are culled by the newsagent before they go on the shelf, or they are culled by the magazine distributor before they are sent. Although from an economic view, I think it saves a lot in processing handling, bookkeeping, transport costs, etc. if the magazine distributor does the cull.

So in summary I feel that the magazine trials show that the publishers can, with no loss of sales can do a better job of distributing magazines.

Interestingly those on the trial that I talked to, felt they needed early returns as some of the magazines they got they did not like and also they needed the ability to change orders as some magazines that were culled they felt they could have sold.

I look forward to reading Boston Analytics take on the matter.

A short time ago, I wrote that research had been done that showed putting a picture of eyes, on shoplifting signs dramatically improved their effectiveness. Here is a sample I showed of such signs with the eyes marked in blue.

Some people asked me about this, so I found these two articles on this subject for you.

http://www.realclearscience.com/blog/2015/12/the_world_would_be_a_much_better_place_if_there_were_eyes_everywhere.html http://onlinelibrary.wiley.com/doi/10.1111/eth.12011/abstract;jsessionid=A3F6C61BB8E32021E28C963D0868D31C.f04t01

I cannot believe it but the powerball in the US jackballed as there was no winner, it's now swollen to $1.3 billion dollars, making it the biggest jackpot in the history of the world. I am sure many retailers here would love to sell tickets for that. It apparently has fueled a frenzy of lotto ticket buying across the United States. What an Australian retailer could do with a powerball like that is mind blowing.

In case you are thinking of entering from what I can determine, you don't need to be a US citizen to win, but *you* need to buy your ticket in the US. It is illegal to buy US lottery tickets online or through the mail, although there are many scammers which will tell you otherwise so please do not give them your money as you may find even if you win, you cannot collect.

What many find very effective is to run the same report for two different time periods to see what changes have occured over time. So they run the report say for this year and for the same period last year.

Here I selected a report of the basket sizes and on the left-hand side, I displayed this year and on the right-hand side I displayed the preceding year.

Now I can compare the variations in basket sizes over time.

Of course if I wanted to examine further what I could do as marked with the blue arrow transfer both reports to excel.

Update: Sometimes you will see some terrific growth; like those that sell fitbits. I can assure you its going to be a very merry Christmas for retailers of fitbit. Apparently, people cannot wait to get their presents and then to set up their Fitbit trackers. What I think is significant is that they are brought sold in a wide varity of stores such as office suppliers and jewellery stores so you may want to look at them.

There have been problems with giftcards. We have had cases where people have sold their own shop giftcards, sold the business and refused to honor the debt on these giftcards, however, with Dick Smith. we now have a different twist.

What happened is that after Dick Smith, electronics announced it was entering voluntary administration, the new administrator announced that they were refusing to allow customers to spent their giftcards. So many people now have giftcards that are worthless. Now what legal responsibility is there for the retailers who sold these giftcards? Well, I suspect soon we will find out.

We do know that Coles and Woolworths have offered to refund the money of anyone who purchased these giftcards from them, even though they have passed on the money they collected on. There are, however, conditions. They will only do it for purchases done since July, and the customers needs to produce a receipt. How many customers have a receipt? Although I cannot fault them for doing this, I am sure they would have determined that most people no longer have a receipt. Possibly those that used their credit card, which would give them a transaction date and receipt, might find the Coles systems might be able to retrieve the original receipt with the itemised account. I would think not, but I do know that the Officeworks system can do it, so possibly the Coles can too.

The other problem is that several large companies such as Kogan have offered to buy these Dick Smith giftcards; Kogan will exchange them for a $25 gift card from them, so soon Kogan will have a big stack of these giftcards. I doubt Kogan will throw them in the bin, more likely what they will do is bundle them together and attempt to get what they can. As I doubt there will be much for them as an unsecured creditor of Dick Smith after the secured creditors are done with Dick Smith, so they may look elsewhere. Furthermore, if people brought these gift cards on credit, what the Australian Securities and Investments Commission has advised people to do, to try get their money back through their credit-card issuer. If it works, then the credit providers will end out with a bundle too, and they will have retailer's name and addresses as well.

The question is what is retailer liability if they sold giftcards that turn out to be worthless? If you sell giftcards from other stores, I recommend you find out.

Our system in its stock search can tell you if you have sold these giftcards. If you have, you need to make a policy of what you intend to do if a customer attempts to get a refund in your shop.

The most important number in retail is the 'Gross Margin Return On Investment - GMROI'

What it does is analyses a business's ability to turn stock into cash.

The formula for calculating GMROI:

GMROI = Annual Sales $ / (Average Inventory at cost) x (Gross Margin %)

Say, for example, an item A sales per annum are $540 with a margin of 30%; you have generally about 40 that cost $2 so your holding cost is $80.

So the GMROI = ($540 = yearly sales)/($80 holding cost) x (30% Gross margin) = 2.0

So this retailer is getting $2.00 in back for every $1.00 invested in this item.

What is commonly done is to use this ratio to compare different items to see where the money for stock can be best spent as it essential that every dollar invested in stock inventory be as productive as possible?

So we may look at a similar item B which has sales per annum are $780 with a margin of 20%, you have generally about 30 that cost $2.1 so your holding cost is $63.

So the GMROI of item B = ($780 = yearly sales)/($63 holding cost) x (20% Gross margin) = 2.5

So this retailer is getting $2.50 in back for every $1.00 invested in this item.

Clearly, the retailer is doing better with item B even though the gross margin is much less.

Now in practice although this is a simple calculation it can be quite a difficult one to calculate as prices, stock holding and margins can change frequently. This is where a computer comes in.

If you go to Register reports, you will see an item "Sales by return on Investment (GMROI)" marked in red here.

Now select an appropriate date range and department to consider.

You will get a report that looks like this. I used a drink department over five years, which is really too long but I want to show a point.

Now in green, you will see the GMROI%.

Then in red the sales in dollars, you need to look at the sales in dollars as a common trap with GMROI is that although the GMROI is high there are no sales.

In Orange, you will see the stock on hand; this is a quick way of verifying that you have enough stock.

How much it costs you now in holding costs is shown in blue.

Altogether, this is an informative report; you will find the summary at the end is loaded with some very useful figures to examine.

So if you’re a number's person like me, this report can be very useful. For example Diet Coke here for example here looks very interesting. High GMROI and low stock holding.

Just another example of how the advantages of our point of sale that can help you make informed decisions to improve your business.

What can happen is that you find some stock on the shelf without a label or barcode, and you need to print a new one?

Well, it is easy to do.

Go into the Main Menu > Stock Systems > Print Barcode Labels (see the red arrow) > click onto the Received Stock History tab.

As you can see you have a wide number of options from which to select.

In this case, I used supplier, and I put in the approximate received dates, as you can see I put in a wide range then clicked on the Find button.

I then selected the binder book to reprint, I then clicked the Add To Print button, I could then look for more items to print a barcode for if I wanted.

Once done, click onto the Print Labels tab > make sure the Label Type option (top right hand side of the screen) have been set to the option Item Label With Price > click on the Print button to print the labels.

Unlike many other point of sale systems on the market our software makes managing labels easy for our clients.

If you read the comments on the Australian Post facebook page here every post by Australia Post is followed by a stream of complaints. You can see that Australians now are very upset with Australia Post.

Check this image too

The raising of the stamp from 70c to $1.00, that is 43% up is also making people upset. This is the biggest increase we have ever seen and how these charges be justified? Australia Post is the largest courier company here and from what I can see its the dearest.

This is going to increase dramatically the costs of doing business in Australia. This will cost many jobs. It is all well and good for Australia Post to say that they are cheaper than many countries, the problem is that the countries; we are competition with like China and USA, have cheaper postage then we do. Have you noticed how Chinese ebay sellers can offer free postage? While an American postage charges are often less than half of ours.

What I do suggest is that many of you switch over to our email statements which our system can produce plus use couriers more. That will save you a lot

Plus another problem with the mail, is Australia Post has announced that is standard delivery time for a letter is up to six days. Email and couriers are faster then that.

Currently, I estimate that about 20% of our sites are at the moment on Windows 10. Many are now intending to upgrade to Windows 10 shortly. No surprises there its a fine operating system but be warned there will be trouble, but it's probably worth it. If you are going to do it, I will give up one tip, uninstall your virus protector do the Windows 10 upgrades and then reinstall your favourite virus protector, although I do admit that the free Windows Defender supplied by Microsoft is a good product, and as it is part of Windows has much less of an impact on speed, compared to many other products.

What is happening in many sites is that your computer keeps bugging you to update to windows 10! The other problem is that there are reports that some who never decided to go to Windows 10, but the computer did the upgrade anyway. So some people are claiming that Windows 10 is a *Mandatory* optional update. Another scenario which I think is more likely is some people got up in the morning, switched on their computer, which asked them a few questions and without them realising the significance of what they are doing, off the computer started on the Windows 10 upgrades, by then its too late to do anything. Lucky for these people, unlike many other point of sale providers our users do have 24-hour support that can do something about Windows 10 upgrade problems after hours.

Anyway despite Microsoft claims that there is no risk as you can go back to the old version of Windows if you do not like Windows 10, there is now a new "massive upgrade" (Version 1511), which once installed means you can no longer go back to Windows 7 or 8.1.

Now if you are one of these people that do not yet want to do a Windows upgrade, and you are on Windows 7 or 8, there is a simple way to stop this constant nagging by windows to upgrade and to stop your computer quietly in the background downloading the Windows 10 upgrades which is not small, it's about 3 GB.

The way I suggest you do it is go to this site

Select GWX Control Panel which is a free program that runs on Windows 7 and 8. Once you run it, it will stop the constant nagging to upgrade to Windows 10, it will prevent you from downloading the version 10 installer files and it hides the "Get Windows 10" icon from the status bar too.

The old year is nearly done, and the new one is on the way. Now is the time to reflect and plan because 2016 will be different.

Although some things will stay the same, in 2014. we had two very expensive court cases that rocked our marketplace; it costed us a major supply Tonnex. In 2015 the court cases continued with Nextra vs Fletcher in the Federal Court what made almost everyone upset was that in both cases, most of us and the judges felt that these court cases could and should have been avoided. No doubt these court cases will continue in 2016. I just hope no one here gets caught up in one. As a person who has been caught up in one, I can tell you from experience even if you win, it is not worth it. I am sure it feels worse if you lose.

Still in 2016, we can expect much of the same as in 2015 but with the accelerator on. Some of the big changes will be:

The gradual change in the Internet from being a fun place where computer-savvy people meet to swap software and play games is changing rapidly into a huge commercial retail enterprise run by some of the largest organisations in the world. .

The rapid growth of mobiles is another challenge; almost everyone has a smartphone. It is replacing now the credit card

and probably soon our house and car keys. You will soon not be able to come into the house or get into the car without a smartphone.

Windows 10 is going to become the standard operating system. Already about 15% of our sites are running Windows 10. Now that the business approved version is out, I know a lot of people are intending to move in March.

Loyalty programs have taken off in 2015; the biggest one in our market space is TLC.

It's grown by over 20% this year. It works out to an average of about 10,000 loyalty members per shop. Interestingly the basket size in the TLC program has also grown by about 4% too, not only are more people using it but they are buying more with it.

And no matter what your thoughts are on cloud computing, and mine is far from favourable in retail, any business today should be using a cloud backup just in case. If you don't already, get yourself a free online storage account. The market leaders here are Microsoft OneDrive, Google Drive, Box, and Dropbox.

Finally as the year draws to an end I’d like to thank all our readers for their loyalty through our hundreds of posts and their comments.

I wish a healthy, peaceful and prosperous New Year.

Regards

Bernard
Editor

To paraphase Charles Darwin

"It is not the strongest business that survives, but rather, that which is most adaptable to change."

What is quite clear this Christmas is that people now do not wait? Today no one wanting to buy will wait. Every second of wait is death for retailers. The longer it takes to be served, the more your customer wonder if they really need your items, often today's consumers are looking at mobiles checking out the items they propose to buy. What if they find it cheaper a few doors down, many are out the door ASAP.

You need a quick checkout.

Here is ours, the fastest one I know.

Click on the picture above and see where it is marked in green. As you can see the operators were regularly doing transactions at a rate of four a minute. Using our system your checkout times will speed up. Therefore, your queues will shrink considerably.
Part of this is because scanning with POS is much quicker than keying by hand, our work in reducing the number of keystrokes required and our use of a quick database. Furthermore, for items without barcodes like cardboard we have an incredible range of rapid searches.

With very little training your cashiers can be reaching these speeds.

I was thinking of the saying that

Good is a bad choice
When better is available

while I was reading of a situation that occurred recently.

The facts are that a customer purchased at a retail store an item. It is unclear why the customer left so quickly but by the time the retailer had printed the receipt which had a free offer on it, the customer was gone. Wanting to give the customer their offer the retailer rang the customer on his mobile and told him about the offer. The customer came back to pick up the offer. So it must have been an important offer for the retailer to call and a pretty good offer for the customer to come back and pick it up.

Lucky it was not a discount voucher as the retailer would not have had the mobile number to call. A retailer with a discount voucher system and no customer information would be dead here.

Now in this case the solution proposed to fix the problem is faster receipt printing to enable the receipt to print out immediately but this is not a solution, for example; some customer grab the items and run once the sale is completed.

Now let us say that something like this occurs in a shop using POS Solutions point of sale, the customer is gone before the retailer can give them the receipt and the retailer wants to give them the receipt. What choices would this POS Solutions retailer have to give them the receipt?

Well their receipt printing is instant but as I explained this does not solve the problem, here are some other options the POS Solutions client has:

1) They could set their system to automatically send all VIP receipts though email which is free. If this option is picked they do not have to do anthing.

2) The could have set their computer system up to send automatically send a receipt though a mobile app, using their regular Internet service at no extra charge. The customer quickly waves his mobile over the dongle and when the receipt is available, it will be sent to them automatically together with the voucher and the customer does not need to wait.

This also gets over the problems of emailing receipts as you do not need an email address as if the customer does not have or more likely is not prepared to give you an email address you cannot email it to them now.

3) The retailer could have sent the offer through an SMS service at a nominal cost. This can be automatic or on demand.

4) They could have done nothing and the customer would have gotten the receipt though their VIP membership account.

5) Finally if the customer does come back, on the bottom of the receipt can be a QR code that identifies the transaction. If that QR code is scanned by a mobile, it will display on the screen that receipt such as above which they can share. This receipt is available anytime, and the retailer does not have to print the full receipt only the QR code, this saves a lot of paper.

As all these options are virtual, our retailer have another two big advantages.

1) They can make the receipt as big as they like, not just 450mm but 900 mm making it much easier to read.

2) They can put more on the receipt, for example, above say the 20% off a bike may not work, but the retailer could also include an offer of a bike pump or a new bike seat that might appeal more to the customer. Why not, it costs nothing to add? They could also add shop opening hours, etc. They are limited only by their imagination.

As you can see POS Solutions clients have many more choices.

This is an example of how a retailer using technology using our system can stay in touch with their customers and stay fresh in their customers’ mind.

The writer of this blog will be on holidays until the December 29, I wish you all a great season and seeing you subsequently.

Last year, I remember thinking how weird it was that Christmas was almost like a standard day. The number of calls were the same as normal. People were ringing up with the same kind of problems as they usually do. Installations were on just as usual. Our accounts department were as busy as usual with the same sort of problems. Basically, nothing was any different.

This year, I confess if it would not be for the pressure that so many of our clients are putting us though now as they need an instant solution, it's a normal day.

What does make it harder for us, is that many of our business partners have gone on holiday mode, on what is unbelievable to me on the busiest retail day of the year? I know they have upset many of their customers.

Anyway, I am pleased to report that our clients are getting value today from their support contacts.

These tables are very disturbing to us, as you can see after two years of dropping the number of support calls are up to this year. In fact, they are up compared to last month and there is no reason to expect this trend not to stay. I am not sure what the reason, but it appears that part is the current confusion by many over magazine returns by Gordan and Gotch. The other is the number of viruses are up, fortunately our engineering staff are on board to handle this.

Clearly, we are going to have to roster more staff on to get us through the seasonal break. It is doable as our office does not shut.

So we will be working straight through this holiday period, and that includes not only our regular support staff but also our weekend support service.

PS Programming, engineering and accounts are not shutting either.

Unionpay is the largest Chinese payment network and the second-largest in the world; only Visa is bigger.

It is the main EFTPOS card used by Chinese tourists in Australia. They spend about $8,000 a trip, and on average, a Unionpay transaction in Australia is about $780. So I am pleased to say that come January, we will have a solution to handle it directly, bypassing the dearer option that many have had to do now.

For more details, click here.