The magazine distributors have requested the ACCC that they be allowed to do a magazine distribution trial. This resulted in many responses from many interested parties. As a result they decided to make a hearing. I was invited to attend.

I found the meeting quite unnerving, as I am not used to talking on a video link there is no feedback and you wonder does anyone hear you, is it working even? This is what you see but the meeting is elsewhere.

There is much interest in this meeting as many people are concerned that they will lose their right to early return, which is the main mechanism, they have to control their magazine stock. Something that is not immediately on the table, although it may be a long-term goal of this trial.

As the discussion progressed, I think much of the problem appears with magazine distribution today in that there are two separate systems. The first group get what they are given and the second (supermarkets) that are allowed to pick and chose what they get. This puts the first group at a disadvantage because few think the magazine distributors are doing a good job. One telling statistic, I thought that was quoted at the meeting is that magazine sales are falling by 6 to 7% a year for many years but the magazine stock being sent out in dollar terms has not changed in the past five years.

The other issue is many people at the meeting felt offended, that here they were very experienced retailers, and it appeared to them based on some of the comments made by the magazine distributors that their experience was being deprecated. I felt similar as I felt our (POS Solutions) experience in analytics and category management was also being so treated.

On the trial itself, I do not think there was any problem with the participants. The majority view was clearly anything being done is better than nothing.

Newsxpress, a newsagent marketing group asked for the right for a trial that would allow newsxpress to select the magazines for some of its members so effectively moving the members in this trial from group one to group two and then use this trial to compare with the magazine distributor's trial. I doubt they will get that. The magazine distributors said it was too much work, something I doubt as all they have to do is move these people over to a supermarket model. Another problem with this is whatever the result of this newsxpress trial; it is not a solution for most people only for Nextra, Lucky Charm and Newsxpress members. That it would work I have no doubt as if one could cherry-pick magazines, I am sure more could be sold. If so, the reasons why the magazine distributors would not want such a trial are interesting to speculate too but another time.

My view is that the ACCC will let the trial proceed, which I have no problem. The people after all are volunteers who presumably can drop out if they want to. I am also fairly certain that these people in the trial will be allowed to early return.

My concern which I spoke about at the meeting was that the results of the trial if based on previous history of such trials, will be selectively released at best. Since during the meeting, the ACCC chairperson did support this as a valid concern and the magazine distributors did agree that they would do this, I think something will happen. My concern is just how much information will be released. I want it all, and I want it public. There is no point in knowing if you cannot talk about it.

Now there is a lot of interest with my clients on whether to move their accounting from a computer to online. It is a good time for the consumer as there are quite a number of good choices now. MYOB Essentials, Xero, Intuit QuickBooks Online, Reckon One, Saasu and Sage. We at moment are waiting to see what our clients do.

Here is my view on the market now.

MYOB

I think it is nice and easy to use the software. It is fairly easy to automate the bank into it. I would budget to use it about $40 a month which includes payroll. Press this link here for details

Xero

It is also a nice program, which has some big improvements coming particularly with the dashboard. People say its confusing at the start to use but after a while its good.

You are probably looking at about $50 to $60 a month for the basic package. What you also might consider is the integration which we have not looked at but one of our competitor's charges about a $1000 plus $35 a month on top for this function. Together it makes it a very powerful package.

Click here for more details

Reckon One

I have not seen it yet, as we're just invited to go to the launch but from what I am hearing its possibly the best one. Apparently, it has a really good dashboard. Pricing is difficult to establish now but it looks very much that the user will be able to nominate exactly what they want and the charges are determined from that.

Click here for more details

Here is a tip, say you are ring up a transaction on the cash register.

In the process of ringing up a transaction, you muck up the discounts. Rather than abort the transaction and re-enter everything in what you can do is press F7 or where the red arrow points and zero off all the discounts instantly and try again.

Here is a tip to speed up scanning of barcodes on the register. Our scanners are very high quality, and they will actually look for the barcode much faster than you can.

So if you want to speed up, your scanning do not look for the barcode, just swipe it in a long arch. The barcode reader will find the barcode and scan it in less time than it would take you to examine your item, find the barcode and direct it to scan there.

Of course if it does not scan try flipping it and scan again. If that does not work, then sorry, you have to start looking.

The legal dangers of commercial blogging were highlighted last week when the Federal Court dismissed Fletcher's appeal that "his publication of an article on an internet blog was misleading and deceptive conduct in trade or commerce in contravention of s 18 of the Australian Consumer Law contained in Sch 2 to the Competition and Consumer Act 2010 (Cth) (ACL). " and ruling that he has to pay costs. The court had also ruled that the Article published on 27 April 2011 had to be removed from his blog, which when I looked into his blog has been done.

If you are interested in reading up on the case it is available click here or if you prefer in word format here

I agree with what the judge stated in his conclusion that "this dispute being far too costly and wasteful for the limited events it canvasses," I am not sure whether the judge is aware but Nextra tried to settle several times for a fraction of what this dispute will now cost. I agree as I think it's a massive of money for what it is although not Nextra after all who have won costs. The costs are huge two counsels who are QC and their time in court and preparing before the court, similarly their supporting counsels, solicitors on both sides, etc. and subsequently there are all these other costs that lawyers like to add like correspondence, reading, delegation and supervision, research, document management, collation, pagination and indexing, copying, preparation, etc. I would not be surprised if the Fletcher lost about a quarter of a million dollars just in this case, then there is the earlier case to consider so double that. There is almost certainly extra costs to come because they will probably end out in what is called taxation of costs. This money, I think should have been far better spent.

Have you ever lost a sale because you or your staff couldn't locate an item your customer wanted in time?
Having a firm grasp of your inventory at each location can make you more sales.

What you can do with our system is assign a location to an item, or commonly what people do is stock on the shelf by category alphabetically. If you like you can set the location automatically by various departments or categories. It also prints on the label the location, so making it much easier for people putting it out to place.

It also means is that, in the worst case, anyone with access to the system can quickly find the item.

Since you know exactly where the item is, you can better serve your customers which make them happy and keeps them coming back.

We have had our local phone numbers changed for our office in NSW. Please note these are the numbers.

Sales And Support

Telephone

Melbourne (03) 9597 7222
Sydney (02) 8035 6666
Perth (08) 6160 3301
Brisbane (07) 3087 5304

After Hours Support
Phone: 0419 553 781

Click here for further details

We have recently updated our notes on how to set up a discount voucher system the most advanced and user friendly system using our point of sale.

Pros: Easy to set up
No set up costs

Cons: Expensive running costs run about 4.5% of sales.
No customer details or buying history recorded.

Click here for details

Because allegedly Australians are the world leaders in illegal downloads, which is dubious if you look at the figures, Australia is introducing some tough laws to combat online piracy. As such many of you may need to reconsider your Internet policy regarding your employee's usage of the Internet, particularly torrents and the downloading of movies and music.

Exactly what is going to happen in the future, no-one knows. It could end out like the US with “speculative invoicing” some of which go well over 100,000 of dollars, or it could be like Holland or India where these rules ended out being stopped by the courts as an invasion of privacy or something between. In the meantime, I am sure that many of you will not be happy to receive threatening letters for the alleged downloading of movies online though your Internet while this issue makes its way though the courts.

So I would suggest that you make a policy that downloads of movies are *NOT* permitted through the work internet.

As well as that in my experience torrents slows your Internet way down.

If you want a very good program for tracking Internet usage, the one we suggest is glasswire available here. What it shows you is how much Internet traffic your computer is producing, both in and out. It also shows you what programs are generating this traffic. It is as well is excellent for checking what you actually consume compared to what your ISP bills you.

If somebody seriously debates, I'm willing to do join in but alternatively if one waffles on and resorts to nitpicking, then this debate is useless.

It's the responsibility of a person making a claim to show if requested exactly what information they have to back up their claim up. If someone said to you "I spoke to a person in UFO who originated from another galaxy." Certainly your reaction if you are being fair is "Just what evidence do you have that you spoke to people from another galaxy? Do you have a photograph, some wayout technology which they left, a piece of unknown element, any such thing?"

The fact is that an offer was made by them to supply the financial information over a year ago; it was accepted and then withdrawn. No-one disputed any of this for over a year. Never did anyone ask for software information. Interestingly enough again they state today "In our own businesses we have the voucher and supporting financial data to prove this. " Emphasis added by me *FINANCIAL*. Fine if you say you have financial data to prove it, let us see it.

I will also note that although I have not asked them recently that others running reward programs I am sure such as the Lucky Charm and Nextra have no problem releasing figures and franchise names to contact that use it. Neither do any independents, I know.

Readers here may be interested in discovering that not everyone liked my article on loyalty programs, in particular, one small part that dealt with Discount Vouchers. I presume everything else they agree with.

Let first start off with the obvious, I would be delighted if Discount Vouchers worked. It would be a good for my clients, and I am in business to make my clients better. Furthermore, I do not appreciate name calling or rudeness. I am not trying to divert anything, and I have done a significant amount of research on this question.

Now this scheme is not new. Discount Vouchers have been used by merchants since Noah brought his wood for the ark. You can read up on it in the Wikipedia here. We have had it for years, just doing a search on our website. 

This states for over a year so we are looking in 2012, and we never claimed it was new or unique. Actually, we did it for a book shop client of ours to their specifications! I am sure that many software suppliers to bookshops like us would also have this or something similar.

Now all the data that I submitted on Discount Vouchers came from publically released information released by a competitor of mine from their system. So it is not my system or what facilities it does or does not have that is in question with these figures. It is their facilities and systems. Click on this image below which is the data I worked from.

At the time I released this report, I noted that their users felt that the results I got were consistent with their results. You can read yourself the comments. Not one person said, "hey my results using Discount Vouchers are different to these figures."

Additionally, at the time, this critic offered to release more data and then withdrew that offer immediately. See here for the formal withdrawal.

This report as such I believe is the most accurate analysis done of what is publicly available. If more data is presented, we (and I mean all here as not only I) would be happy to review the information.

That I feel that this loyalty program is expensive, well most reward programs in a retail run at about 1% of sales see here. The Discount Vouchers scheme as you see from the above image run at $4,475.89/$98,299.79 = 4.6%. It is expensive! My immediate thought when I first saw this figure is that it is worse because it lacks any form of targeting, so it would find it hard to get any suppliers to help. This supplier help is a great help to almost any other marketing programs such as the Lucky Charm program.

I would like to see what evidence that this discount voucher scheme attracts “a valuable shopper delivering bonus margin dollars at the high GPO end of the range offered in the business.”

This brings up another problem with the scheme, how could a retailer know that it delivered a “valuable shopper," this scheme has minimal measurements! The biggest question with this scheme is trying to figure out what business you would have got without the program compared to what you would have gotten with it. A VIP rewards program has an A/B testing facility. You give part of your VIPs a benefit, and you see whether it makes a difference compared to the rest. This is simply easy, straight forward and it works. Unless something can be measured it is vapour, and it cannot be controlled.

Finally, a Discount Voucher scheme, gives a voucher for every sale, if I have never brought anything in a shop, how does the shopkeeper give me a voucher? To give me a voucher the retailer needs some means of giving me a voucher, e.g. a pamphlet, an email message, a letter, etc. This is what a VIP rewards program does. So we are back to a VIP rewards program of some type.

I remember one client of mine that ran for a while a Discount Voucher system, told me that a customer came in and took two magazines. He then purchased one and promptly used the discount voucher to buy the other one. What he felt was that Discount Vouchers produced no incremental sales lift but caused a cannibalisation of his existing revenue by selling at a discount, product that would have been bought anyway. This was the first sign, I had that something was not right.

I leave it to you the reader to decide whether I have raised valid questions and reply hopefully without rudeness and name calling.

The latest copy of Artwrap catalogue file, is now available for download.

For this and other supplier files please visit here

A script now is being prepared to change automatically the Saturday edition of the Daily Telegraph from $2.00 to $2.20 GST inclusive from Saturday 18th of April.

Unfortunately, people with old DOS systems will need to change the newspaper price manually.

I was asked yesterday about what sort of loyalty program would I recommend. The point is that our point of sale permits many loyalty types that are different. Note with us, they're not mutually exclusive you could utilize several together.

So my customer asked should they normally use a price reduction voucher system (where you give mass discounts) or a loyalty program (commitment system).

Firstly i actually do not like discount vouchers as they are incredibly costly programs.

Additionally what type of person will you be attracting, those that like perpetual discounts. I have seen a report that people whose first purchase is induced by a price reduction are 50% less likely to want to make a second purchase. This I can believe as what your discount is doing is attracting consumers hunting for a bargain, this is scarcely prone to instil shop commitment.

Also, it has no chance of reaching those people that do not buy in your store in the first place. If they have never ever purchased something in your store, just how will you provide them with a voucher? What you need to provide them with a voucher is some type of loyalty system. So we are back to a loyalty commitment program.

Lastly, all good things may come to an end. With the best of intentions, you may have to pull the plug on a program. You do not want a bunch of angry customers if you do. It is very hard with Discount Vouchers to pull the plug. Once you pull the plug they are gone.

I recommended that if they go down this track that you use a loyalty program.

Customer loyalty programs do work. Here is an example

However, it has to be done properly and it does involve some work. You do need to look at your demographics (gender, age, etc.), see your clients purchase history and use heavily your point of sale for crucial insights into sales. Our point of sale enables you once its set up to easily add a powerful, effective loyalty program without having to spend much and should encourage higher spending and repeat visits. It does allow you to keep in touch with your customers. Shoot them a "thank you" email to clients who make large purchases. It can let your customers know when your store is having a sale or a special promotion.

What you are trying to do is differentiate yourself while balancing revenue and costs, this only a loyalty program does.

I have been invited to make an oral submissions to the ACCC at a pre-decision conference in relation to the application by the Magazine Publishers of Australia

The Association of Magazine Publishers of Australia (MPA) has applied for authorisation to enter into an agreement to undertake a pilot program to test and refine proposed changes to the current magazine distribution model. The pilot is to be conducted by magazine distributors Bauer Media Pty Ltd (through its magazine distribution division Network Services) and Gordon & Gotch (the distributors), in relation to magazine distribution to approximately 20 selected newsagents (pilot participants) for a period of 3-6 months.

Under the proposed arrangement the distributors would be required, in relation to distribution of magazines to pilot participants, to:
- cease distributing a title if the magazine title has experienced consecutive nil sales by the particular pilot participant for a period of time
- limit the number of copies of each magazine title to a certain percentage above the number of the title generally sold by the pilot participant
- in most cases not require pilot participants to provide returns of full copies of unsold magazines, but instead accept front covers, headers etc as evidence of unsold copies
- adhere to certain restrictions on the redistribution of issues which have already previously been distributed, to the distribution of new magazine titles, and to split deliveries of magazine issues during the period the issue is on sale
- restrict the period for which pilot participants are required to display magazine issues for sale to 12 weeks or less, except in certain circumstances.

The pilot is to intended to assist in the promulgation and implementation of a Distribution Code of Conduct, whose object it to optimise the supply of magazines to newsagencies generally and increasing the sustainable return on investment for newsagents, publishers and distributors.

On 12 March 2015 the ACCC issued a draft determination proposing to grant authorisation to the arrangements. The ACCC also granted interim authorisation to commence on 1 April 2015.

More details are available here.

Australian Bureau of Statistic's retail product sales here continued to climb in February by 0.3%. This follows a growth of 0.3% in January 2015 and an increase of 0.3% in December 2014. It is all up.

This is very close to what the NAB’s survey found of a 3.7% increase in sales year on year. Furthermore what I found interesting was that 93% of all retail sales in Australia comes from traditional retail outlets.

I had an enquiry about whether our system can handle the proposed bank deposit tax which appears to be certain to come soon. Since details at present are vague as to what it will be, it is hard to answer this question. It will depend on what the government defines as a deposit and then whether the banks will pass this tax (levy) on as a fee and/or as a lower interest rate. Now if the banks do pass all or part of this on as a customer fee, it remains to be seen which accounts will be affected.

I can say this our software can handle fee surcharges, so we could simply add a 0.05% fee to all transactions. Note this would be true even of cash transactions as that money has to get into a bank account to pay suppliers.

Now let me get rid of some paranoia about EFTpos. An EFTpos transaction is simply an instruction to transfer monies from your customer to your bank account. As your EFTpos provider does not hold your cash, so EFTpos transactions are not going to get a double hit.

Here is report of transactions going through the cash register

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 should 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 fast database. Also for items without barcodes like cardboard we have an incredible range of fast search

In addition, your customers will appreciate the extra detail available from our point of sale receipts.

If you have not got the time, look at our speed retail.

The ANF submitted to the consultation on Post Implementation Review (PIR) Tobacco Plain Packaging.

Their main claims are that it has had minimal significant public health benefits, that the economic impact on its member has been substantial, and that it is unfair that SMB should not have to carry most of the cost of this legislation. Although I will not comment on the last point, I feel the first two points are correct.

I data-mined tobacco sales from 2006 to 2014 and can find no evidence that plain packaging had any effect. It's a total blank. I agree with the ANF that the reduction in sales is mainly due to the higher unit costs of tobacco, although I would add that the drop in magazine sales is also having a significant effect on tobacco sales among their members.

I do not think this was a well-thought-out campaign by the government.

Here are some interesting links if you wish to check this out further:

http://www.theage.com.au/victoria/authorities-seize-15-million-of-illegal-tobacco-in-victorian-property-raid-20140504-zr4cg.html