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Newspapers continuing slump

POS SOFTWARE

Years ago here because of the importance to many of my clients, I used to analysis newspaper sales. In those days the newspaper companies ruled a large slice of Australia's retail stores. Milk bars, newsagents, lotto agencies and small supermarkets would go into a panic after a threat of a newspaper rep to cut off their newspapers as newspapers brought in a significant number of customers every day to them. Well, those days are long gone. 

The latest report by the Audited Media Association of Australia, for the last half of 2018, reported most major newspapers publications fell around 10% about the same decline like last year and slightly higher on what I reported here five years ago.

See the latest figures for the decline in newspapers here. 

 

Weekday circulation from ABC

The figures are worse then they look as electronic subscriptions are included which have less profit then printed copies and as the newspapers' financial paying readers who I suspect are now almost all 50+ go, so will the printed newspapers in Australia. 

In retrospect, I am sure that much could have been done better by the newspaper companies, for this I blame personally poor management and the editors. 

Although I liked very much the people personally in News Corp and thought they were really trying to help, I always felt that they needed solid modern marketing professional help which they never got till it was too late.  

When I went to meeting at Fairfax and News Corp which was frequent to discuss circulation. I and I think almost everyone at the meeting would leave thinking that we were talking to a brick wall. It did not matter what anyone said, as nothing was appeared to being listened too and nothing was being acted on. Here is some example from submissions that we put in:

-When the newspaper companies were talking about getting on subscriptions, we pointed out that the only result would be that people paying full price for newspapers would get used to paying only a discounted subscription. Once they got used to paying a discounted price, it would be impossible to get them to pay full price again. We were right because that is what happened.

-Our research showed that many people were buying newspapers just to do the crosswords, so we suggested changing the crossword every edition. Great idea I was told by the News Corp, nobody got back to us about our research and nothing was done.

-We offered to link the computers across Australia to their computers to improve handling of newspapers. Again nothing was done till years later.

-We pointed out that many of the newer statistical software programs and mathematical methods could be used to calculate potential demand sales better, yet nothing was done.

-We pointed out that as smaller companies were dropping unprofitable circulation, so a marketing opportunity was being opened for the larger newspapers that were still serving those areas. The local newspaper sellers should then be armed with leaflets with an offer to promote the other newspapers again nothing was done.

-When we pointed out that repeatably the newspaper companies were making changes that were difficult or impossible for the newspaper sellers to do, no-one listened. The changes would come, and there was no way it could be done. As a result, the public is getting one message from the newspapers advertisement and when they went to collect it was a different message.

Soon we and others just stop making suggestions as nothing was done which is probably what the newspaper companies management preferred although I am sure the shareholder and newspaper sellers lost millions of dollars as a result.

As a person who has been involved in newspapers in Australia all my life it is very sad and overall I doubt that much could be done for newspapers. The newspaper companies although they were huge then and their product was popular was already on a decline for 30 years as electronic media was taking even then a large chunk, and the recent development of the internet speed up this decline.


 

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Shoppers today were eager taking on Boxing Day

POS SOFTWARE

It is expected today that retailers will bring in about $2.3 billion sales today and about $18 billion in the following three weeks.

 

I spoke to a few of my clients and generally, they were happy with the trade this season although many told me that this season started off slow but built up. This slower but longer pattern appears to be a long-term trend. 

Some of my clients will be doing half their yearly trade in this and next month. One of them told me, he was doing an actual speed test of just how fast our system can be under pressure. 

From what I could see, people were queueing up, it is not often that you see shops with barriers in the front and a guard managing a queue to restrict public access to a shop. I took some shots at the DFO Moorabbin, they are actually bigger then they look as people were lining up in a snake queue

 

DFO Moorabbin Boxing Day queue

 

DFO Moorabbin Boxing Day queue
 

DFO Moorabbin Boxing Day queue

 

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Cashless retailers penalise the poor

POS SOFTWARE

Although this issue has not hit Australia yet, overseas with so many retailers going cashless that politicians are concerned that very poor people with problems of electronic banking are having problems shopping.

Some shops now in the US will accept cash but do not give change.

What is happening is that overseas retailers are going cashless. This is partly as its faster as its just a swipe, its cheaper as the cost of cash as handling costs of cash is estimated at a few percent which is more than the fees for electronic cash and more secure as cash is always a security problem. 

China is now nearly all cashless, while the US is in retail about 70% electronic, and Australia is 63%.

At the current trend, cash will vanish in Australia in 2026. I expect long before that almost all our clients will stop accepting cash.

While they don't have a screen and they are not much more than a fit bit just now, smart rings are the new buzz. Watches can be annoying to wear, especially if you have to do  a lot of typing to do. It won't be long now before all you will need to do to pay for things is flash your pinkie like a wonder twin.  These rings without a screen being more a simple deice than a watch will be cheaper and probably will be an alternative for a cheaper option. 

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Fairfax commission rates for December 2018

POS SOFTWARE

This is a composite I created for the current margins.

 

Margin analysis Fairfax Dec2018
Margin analysis for Fairfax Dec 2018

For those people that do deliveries, they are up and so by extension are subagents.

Interestingly for those that are classed as retailers, the margins are continuing down. I would be surprised if this downward trend does not continue. If you think about it from Fairfax view why should these people get more then subagents who are now at 9.6%?

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AMAZON back flips, it is reopening its American site to Aussie

POS SOFTWARE

 

Amazon Australia as I expected has not done well, the problem is not that our retailers are inefficient or not tech-savvy but our overpriced, undependable and slow delivery services which are holding us back in e-commerce plus our small comparative market. 

So now Amazon has done a backflip and will sell Aussies Amazon stocked and sold products from the US. I expect soon that the 3rd party sellers on Amazon will be released soon.

What happens with the costs of delivery to the Australian consumer from Amazon overseas sites will be interesting. Will they keep the Prime subs which allowed free postage over $49 from the US store?

For Australian retailers, the opening of the Amazon sites overseas is going to increase competition, and the two immediate issues are they need to look at their e-commerce and their delivery options.

Where we are unique in our market space is that our point of sale software is a unified commerce solution which brings together both of these issues into one platform in your POS system. Pieced together systems, that our competitors offer cost more money and lead to problems as different systems both in use, training and the need to talk to each other. Plus there is no long-term as who knows what the individual and separate parts are going.

Only our unified system gives you long-term as well as a day-to-day business solution. Click here for more details

 

 

 

 

 

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Retail apocalypse in Australia?

POS SOFTWARE

The retail apocalypse in the US is the closing of a large number of brick-and-mortar retail stores and shopping malls from 2010. Here are some haunting photos of abandoned shopping malls across America

 

The question being raised in Australia now is going to happen here too? It is difficult to say, but so far almost everyone agrees that it has not happened yet. 

I went to the Australian Bureau of Statistics and went to their page here on retail.

 Then selected chart number 8501011

Then using excel made a graph of yearly sales for every sector since 1982 to 2018.

Australian retail sales 2018

As you can see overall, it does look good. Overall retail sales and retail property overall in Australia have been healthy. Yes, there have been terrific changes in the retail landscape, for example, video rentals, books and newspaper sales are all down, but others such as food and footwear are up. This up and down by different sectors in retail has been going on since retail began.

Now some of the sectors in our marketplace look good.

ABS Pharmaceutical, cosmetic and toiletry goods retailing

 

However when you look at the one that seems to be now creating the most concern in our market space - newsagencies.

Newsagency and books 2018

It does not look so good, and I have been to many discussions and meeting about this sector's performance that is concerning many of its suppliers, as you can see its high water mark was about 2010. 

However, there are several points to keep in mind. The first point is that many shops move across sectors. A shop that is doing poorly in newspapers can switch to other fields e.g. I have had clients that have turned their shop into a cafe, gone into art supplies, become gift shops and toy stores. Soon it is no longer a newsagency but something else. 

The problem is that most suppliers cannot move so quickly. A newsagent once he moves partly to becoming a cafe, soon loses interest in magazines (profit margin 25%) because they have more valuable stuff to sell like cake and coffee (profit margin 55%). The magazine company soon gets very upset.

The other issue here is that just because a sector does poorly does not mean that an individual shop in that sector does poorly. I have a client that is bookshop nearby a large bookshop closed down, and their sales went up dramatically as many of the customers of the large bookshop came to them.  

Which is moving to an interesting point that often what we see in a sector as the sector drops the players inside that sector do better! 

For example in 2013/4 according to IBIS, 2500 newsagencies did about $1.9 billion in turnover about $760,000 each, in 2017/8 1960 newsagencies did about $2 billion in turnover about $1,020,408 each in turnover. Probably what happened is as the newsagencies consolidated, they kept enough of the clients, so individually they gained and then sold these customers other products to them.

 

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Lottoland a lot of correspondence coming through

POS SOFTWARE

 

I got a lot of correspondence about it. Interesting they are all coming through attached with confidentiality clauses so I cannot talk about it. Why should these people only want to be talking in secret?

The point that seems to be concerning people, in particular, was my quote from NANA that

“Throughout the campaign orchestrated and funded by Tatts Group Lotteries, a campaign on which they have spent more than $5m, they portrayed the resistance they have created as being initiated and managed on a grass roots level by newsagents and other lotteries outlets. Make no mistake, the campaign was and is funded and orchestrated by Tatts Group Lotteries. Some newsagent and lotteries associations have tied themselves to the campaign and appear to act as mouthpieces for Tatts Group Lotteries.”

Actually, the figure of $5 million is, of course, a gross understatement, the $5 million figure is for last year, this year I am sure that it will be much more than that.

 

The gaming industry has been following the news closely, here are some links.

IGaming Business

Focus Gaming News

Reviewed-Casinos

One point please consider, whether the legislation through or not, lotto agents are on their own the day after.

 

PLASTIC BAGS out Coles and Woolie

POS SOFTWARE

 

With the recent announcement by Coles and Woolies that they are phasing out plastic bags, many of my clients could see this as an ideal time to access what they are going to do about their packaging too.

On one hand, by having bags it certainly encourages people to buy more, many people appreciate these bags. The other problem is that if they bring in their own bags, they are limited to how big their bags are. So I have had clients after getting rid of bags brought them back in the shop.

On the other hand, many in the public do not like it and in places like Canberra, they have already implemented bans, plus it costs. An article on the ABC that estimated the cost savings to Australian supermarkets of plastic bags was $171 million a year?

Here is an idea you may want to chew on, free bags if the customer purchases over a certain amount. It may encourage them to buy more. Easy to implement such a change in our point of sale system.

Anyway now is a good time for many of you to make a decision.

Smart Card VIP systems

POS SOFTWARE

 

If you’re still manually controling your loyalty program, you are wasting your time and resources.


Consider replace it with our point of sale which is available free to our users. All customers have to do is display their VIP card, if they do not have their VIP card all they need to do is give you their name, phone number or email address and your system can track their purchases and issue them their rewards.

You will be surprised who uses them.

 

 

 

 

 

 

Security basics: Is your point-of-sale being used as a seedbox?

POS SOFTWARE

As from today, several well known pirate sites - The Pirate Bay, Torrentz, TorrentHound, IsoHunt and SolarMovies are being blocked in Australia.

 

 

Currently it is laughably easy to bypass these blocks as the ISPs are only doing the minimum but its early days.

What I have noticed is that these blocks, do not seem to be enforced on many business accounts. Which means that many people have discovered that using their business Internet, they have a free seedbox. All they need is a smartphone which most people have, the WIFI codes that most employees are given and a free torrent app.

This causes, however, several problems for the business.

1) Much of the bandwidth of their Internet is being used by these programs, and their Internet runs slow.

2) Then their plan limits are exceeded so they get extra charges or get put on slow.

3) And the big one, is they could get involved in a major legal problem.

The quickest way to see if your pos system is being used as a seedbox, which should catch most of them is to go to this site here.

If you come up, then I suggest you investigate. About 4% of my clients are finding something.

I find it very good, using it we caught an accountant who was doing a job here on behalf of one of our clients, downloading torrents from her laptop while she was working here.