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Its official, Australian retail turnover up 3.3 per cent in July

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The preliminary retail trade figures have been released by the Australian Bureau of Statistics (ABS). It shows that Australian retail turnover rose 3.3 per cent in July 2020, seasonally adjusted. Interestingly turnover rose 12.2 per cent when compared to July 2019.  This is true in all states and territories except of course Victoria.

In my experience, these figures are what our leaders will be using to base their decisions

You can get more details here.

Considering what sort of a year it has been with bushfires and COVID-19, we can be all very pleased with that figure. 

 

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From now on is the future in Virtual Trade Shows?

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We are all used to scenes like this, at the trade shows!

dog lovers show Melbourne

 

Years ago, people meet at trade shows as they went from stand to stand. They introduced themselves and exchanged information about current products. They saw new trends, learnt about coming innovations. They were fun for both the public and the trade people to go too. 

The most critical aspects for a show was the location and the timing. The problem was that it often costs a ton on money to go. I had a client that wanted to go to the Chinese Gift show. He was adding up the costs of airfares, food, transport and lodging. His biggest problem was the timing of the show, which was not convenient for him. For the exhibitor, there was all this plus a lot more costs. 

Well even before this pandemic hit, many of these shows were going. This was even before COVID-19 hit. I blame much of this on the internet. If I want to research an industry, I go to google. Why do I have to go to a trade show? Now in business, if it does not pay, people stop coming. This is what has been happening for years now. Attendance in most trade shows has been dropping. 

So trade show organisers started experimenting with virtual shows. Results were very dubious. Part of the reason has been the organisers, have been asking for too much money from the exhibitors. Plus most exhibitors felt that Virtual Trade Shows were no substitute for the real thing. 

Now there is another problem, COVID-19. This is why we recently got notified of another trade show cancellation, the Reed Gift Fair in Melbourne. It is hardly the only one; exhibitions all over Australia are cancelled. 

So now people have to assess whether to make a virtual show or have no show. 

It has a lot of benefits. 

1. Reduced costs as a virtual show is much cheaper to hold. 

2. Much more accessible for people to attend. 

3, They can last longer, a suitable venue can only be booked for a short time, virtual shows can last as long as you want. 

I saw a recent report, that stated "by 2025 more than 65% of traditional trade shows would be virtual and by 2030 this number will have jumped to 85%. " 

So where are we going with this? Well, things are not going to back to normal. Face it, why would you want it to go back? I attended a virtual show recently on a new computer range with AI sensing. These computers promise to be much faster than current computers. I would never have attended as it was *held* in India, but with an internet connection, I could go. I asked questions and saw these computers in operations. I was sold and we intend to be selling them soon. 

This is the future of trade shows, virtual! 

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In these troubled times, when everyone is getting lost what to do.

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In these troubled times, when everyone is getting lost on what to do. We are seeing the entire country is coming come under quarantine orders. Consumers are shunning human contact. Retailers are scrambling to adapt. What is reassuring is the work done by the various retail associations to me notably VANA, Pet Industry Association, VECCI and the Pharmacy Guild

I am in communication with them often. I know that they are in contact consistently with major decision-makers. I would say the advice and help that they are giving me and their members have been first class.

Who knows what to do now?

To find out I am reading all the information they are sending. Sometimes this helps me to know what to do. If I do not know, I am grateful that I can ring them up to get an explanation so explain to me the situation. What I do appreciate is if they do not know, I am getting the truth that they do not know. I also appreciate that they are explaining to me fully the situation.

I confess without these peoples help now. I would be lost.

I am happy, and almost all my clients would agree with me that when they need their local community, is working for them.

Yet there is a lot more work as it is clear that this situation will last months. The Spanish flu lasted from February 1918 to April 1920.

Where I disagree with many people, is I doubt after we are going back to what was. This virus will change the reality for us all. There is no going back. People are getting used to a new type of shopping. Shops are reporting to me that they are seeing customers that they have never seen before. Many of the people that you used to deal with are not coming back. Their customer base and so their needs have changed.

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Google Fastest Growing Product Categories

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Google has created a new tool — Rising Retail Categories — to provide retailers with information on the fastest-growing product categories in their search results. The point Google makes is that since the outbreak of coronavirus, there has been a significant change in consumer interest, so to help retailers see the changes they have created this tool. I picked on the category "Greet & Note Cards" selected Australia and looked at the past week.

Not surprisingly Mother's Day was big, but interestingly birthdays and anniversary cards were on the increase.

Here is a video to explain it.

If you want to have a shot click here have a play and see what you think. I think it will give you some ideas.

 

 

 

 

 

 

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Latest Australian Bureau of Statistics on retail trade released

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These figures are what are leaders will be using to base their decisions, so like many people associated with retail, I was looking forward with great interest to see what these people produced. You will find their results here for the March month. 

Unfortunately, it is limited as it only breaks it down into these retail types

Food 
Household goods 
Clothing, footwear and personal accessory 
Department stores 
Other retailing  
Cafes, restaurants and takeaway food services ;

The spreadsheet, I think that you will find to be the most useful is: TABLE 3. Retail Turnover, By State 

Now select the retail type you find most useful and compare March 2019 to March 2020.

Now you will get a feel of what the government and ATO think is happening now.

From what I can see, based on these figures food and household goods are up. No surprise there as many people were sitting at home with little to do in March so they cook and fix up the house. Conversely, clothing and restaurants were taking a big beating although not as high as I expect. We will need to wait till April as lockdown only started in Australia in late March so most of that change here is the voluntary lockdown. which we can expect to continue after the official lockdown ends. People are not suddenly going to go shopping just because the government says they can.

One point that does appears based on our figures that it does not show here but I think you will find when you compare figures is that people are shopping less but buying more on each trip. 

 

 

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More shops on The Department of Social Services Cashless debit cards

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We are now shortlisting candidates for the Department of Social Services Cashless debit cards in the trial which we are involved.

Now the Federal Government has decided to extend the trials, while I don’t have any inside knowledge of future government decisions, I believe that It is likely that within two years, these cards will be Australia Wide as these will be I expect the primary means of paying social security. 

I know that stores on the program are positive about it. 

Currently in some areas now, over 60% of the people have these new debit cards. For most of them, it is their only financial means. The situation now is if you are in these areas, if you cannot accept these cards, you cannot make much trade with these people. 

We are very pleased with the fierce competition out there that we picked to do the trials in our market space we were picked by software and computer experts. 

 

Cashless_Welfare_Card

In the long term, by numbers, depending on how you count between 33% to about 50% of Australian households get social security payments and with our aging population, this is likely to increase in the future. Plus I can also see many people with drug and gambling problems volunteering to go on these cards and the courts enforcing these cards too on people with problems. 

If you want to look at it in dollar terms, we pay about $180 billion now in social security a year of which at least 80% plus will probably go through these cards. The adult population of Australia is around 18.2 million, so just with that, we are looking at about $9,000 a person a year.

For many retailers now these cards are significant and I am sure soon for many more.

 

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Bauer Media what is happening???

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As many of you know Bauer Media has been doing some intense cost-cutting including closing its entire New Zealand arm.

Now it looks like it is trying to amend the agreement for Seven’s magazine assets, however what is worrying is if you read this article about it here.

Mumbrella understands some parties are concerned that should Bauer Media choose to exit Australia, or be unable to

continue business here.

For magazine sellers this could be very serious as Bauer Media is the publisher of the Australian Women’s Weekly, Woman’s Day and Gourmet Traveller, among many other titles.

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Uncertainty over Bauer, on its Pacific Magazines acquisition

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It appears that the Bauer may be reconsidering its proposed purchase of Pacific Magazines deal despite getting ACCC approval.

Everyone is sure it has to do with the uncertainly of coronavirus.

If I was Blauer,  I would be wondering about coronavirus firstly what it will do to circulation. Some think that with more people at home, reading magazine will grow in popularity.

Still, that is not the big revenue issue but the fact that that the outlook for advertising spending is down, the prime problem here is the postponement of significant events such as the Olympics.

If it does not go ahead, I think that it is unfortunate for many magazine resellers, as the commercial reality today means the acquisition it is necessary to produce cost cuts required by the industry.

Having said that despite what has been said the circulation declines in the last few years, I expect more magazine titles closing. What is important is that this acquisition may reduce this trend.

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Note on newsagency computer systems and numbers

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A competitor released a dubious statement which among claims is that they serve more newsagencies then anyone and that this is shown by evidence that is 

1) recent

2) independent

3) verified 

As such from what I gather their system

1) the industry standard - something that I doubt eg much in magazine processing and lotto they cannot do.  

2) Not expensive - something that would surprise many of its users and me too.

When I queried them about what the evidence, it appears that it comes from a series of court cases they were involved in going from 2004 to 2009, hardly what I would call recent.

If so it would not be what I would call independent.

They then claimed to me that the other side agreed with the facts. The problem here is that the case never was resolved in court so that the judge would not have assessed this. Still, then it gets puzzling as I went through the court records and the opposing barrister's book, which has the information they need in the case. I can find no record of such a document. When I queried my competitor about this, I am still waiting for a reply. Until then, it is hardly what I would call verified.

So I have great doubts about all this, but I am willing to keep an open mind if they want to show me the evidence. 

Note: We offered to have an 

1) recent

2) independent

3) verified 

report on this subject with them, when it mattered and they refused.

 

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Afterpay Touch Group - eServices Wind Down continued

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Many of you have contacted us to ask us what is happening as a result of the Afterpay Touch Group winding down their eService business. 

Please give us some more time.

To fill you in, if you are not following the story.

Touchcorp was in Dec 2016, was making a profit of 11.5 million dollars

Take a look at its revenue figures in yellow and its profit in blue from the report 

See what Afterpay are walking away from? It states much of the changes in the economy.

We do not consider the ePay terminal, which is not integrated as a satisfactory solution.

But rest assured that we have been on to it. We have spoken to Touch management, ePay, Telstra, I think all major gift card distributors in Australia, the fisheries departments, NewsCorp, WA news, etc. I have also communicated to a whole lot more, e.g. Optus, VANA (who by the way have not responded for some reason), etc.   I can report all of these are in a state of shock about it too.

This is partly as who wants an extra box on the counter and partly as there is so little margin to be made out of these products that to make it work, it must be integrated. Beside our integrated solution gives I believe the best margins to retailers, why should they drop margin on a terminal?

I told these suppliers straight out that we consider this a significant product to our clients who are doing in the high teens millions of dollars trade a year with these products. Okay I told them, it does not produce a high income because your margins are so low, but it does bring many people into the shop. As a first-level approximation as even a small shop is getting about two trades a day. Assuming a client acquisition cost in retail in Australia at about $15 and about a third of the trade is new customers, we are looking at (2 a day x $15 x 300 days a year x 3 years x 33%) = a goodwill value of about $10,000 lost if no alternative comes forward.

Okay, we hope to have something soon to tell you, but please give us a little more time as we are reluctant to discuss what is being proposed until we have confirmation about where our users and we stand. The last thing we want to do is to say something which does not happen. 

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