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.

A few of my clients today contacted me very excited over some fantastic news that the Queensland Government has offered to assist small to medium-size business with up to a $10,000 grant to them for $10,000, to assist them in their digital services needs. That was where we were to come it since our integrated point of sale with its digital marketing website and social media services seems to fit the guidelines for this grant, which then would allow them to take their online marketing efforts to the next level. As this grant can include in part their own labour charges and is EX GST with an expenditure of $8,000 they could get a $22,000 grant for a website. I said it sounds too good to be genuine and I told them you are probably listening too much to a piper. Still, I immediately took it up with our legal R&D; expert. The offer is true.

The big problem I see is in the fine print which states that approximately 200 applications will be approved each year, distributed over the three rounds. That means out of this roundabout 66 applications will be accepted. I have no idea how many intend to apply, but I am certain the number applying is going to be well over 66, and I am confident that many of those applications will be very strong.

The other issue I did not like is that the offer is so broad that many business proposals could apply, you can use the money on online marketing audit, plan and implementation. Search Engine Optimisation, Pay Per Click Advertising (Google AdWords in Search Advertising, Display Advertising YouTube Advertising or Shop Advertising), Social media management and marketing plans, optimised landing pages, creating mobile-specific pages, content creation and infographics, implementing an online payment system for your website and more. That is a very broad range of products nor is it really a lot of money for some of these activities, SEO alone costs about a $1,000 to $2,000 a month and rarely works in my experience. Google AdWords can be about the same.

The rest does not appear to be unreasonably hard to achieve.

Your business must have fewer than 20 employees now.
The company must have an Australian Business Number (ABN) and be registered for GST;
The business operations must have a strong Queensland connection.

Still I do feel that for many, it can be a very good offer, we certainly I think could help you make a strong case that would fulfil the criteria and if anyone of our clients in Queensland has an interest in having a shot at it, I am also sure we could together create a truly strong application.

However, if you do want to proceed, we must move now as your application must be in by 9 December 2016.

Amazon has announced that they are coming to Australia with physical shop and distribution centres in 2017 in every state. I am sure they are going to be strong competition. They already have an established retail base in Australia, which reading the comments at the moment on twitter are looking forward to Amazon coming. They expect soon to have access to more products that Amazon do not ship to Australia.

Once here Amazon intends like in England to expand into a whole range of products, including groceries. The farmers now are complaining about many of the margins Coles and Woolworth offer; I wonder what they are going to say when they see Amazon's margins? A friend who wrote a book, told me that they sell a lot, but they really cut her royalty payments down.

The fact is that Amazon with its huge buying power; its stress on on-line and first-rate delivery services will pose a unique challenge to the Australian retail business model. Will an Australian shop without an online POS Software presence be viable soon?

Here are some links, to read more.

Aldi and Woolworths to Amazon: BRING IT ON
Amazon is about to 'destroy the retail environment' in Australia, report says

In relation to the problems that occured recently with their stock files and the confusion that it generated with our clients, on behalf of our clients we complained both to VANA and Blueshyft.

VANA have assured us that they are aware of the problem and have addressed it.

Blueshyft replied too with the following email.

Hi Bernard,

Thank you for your email.

XChange-IT was supposed to have distributed the barcode files to the POS providers prior to our email to the network, which we believed they had, however we were informed after the email was sent that it actually hadn't happened yet.

We are immensely sorry for the miscommunication, and for the inconvenience caused.

Kind regards,

Zoe Archer
Operations Manager
1800 817 483
blueshyft.com.au
Blueshyft
Pier 8/9
Level 4, 23 Hickson Rd.
Millers Point, NSW 2000

We hope it will not happen again.

Yesterday many of you would have got the newsletter about Tatts Group FY15/16 Report for those that did not it's available here.

If you look at the FY16 Investor Presentation there, the relevant pages for retailers are pages 6 & 7. From that I created this table.

I double checked and the figures match the report.

Overall sales went up by 8.2%, clearly, online sales went up rapidly by $69 million but Bricks and motor outlets went up even more - $93 million. For retailers as the number of outlets went up slightly the average sales for their outlets went up over $22,000 or 5% to $473,559 an outlet, which is a terrific result for a mature industry in today's retail environment at the point of sale.

Clearly though many of these retailers would have concerns with digital, I still think this though is a long-term threat, here are some figures from the page.

On a graph, it looks like this, as you can see the growth currently is not that rapid and there does not appear to be that much of a relationship between the digital and the Bricks and motar customer.

Looking at this, I would say that the retailers still have more good years before being replaced by digital.

For those that have a mathematical interest, I did an S curve calculation to 2020 based on these figures and got about 25% of the market will be digital then.

I would not be surprised if it higher but I think it gives an idea.

While in Germany, one place I had to go to was the pet shop in Duisburg called Zoo Zajac as it is according to Guinness World Records, the biggest pet shop in the world to get ideas for our software. So we drove five hours to get there, which is not unusual as many people go that far just to buy something there. Once I saw it, I could see. Why. I just went "Oh My God." The warehouse alone is bigger than the MCG. They call it a zoo, as it has more animals then most zoos. It has just about everything for animals, including animals like crickets, meerkats, dogs, cats and monkeys. It has something like 500,000 different types of fishes. It has 170 staff.

Just to walk around is a big job. This is not much of a problem to the owner Norbert as he drives around on a bike all day. I found talking to him; I had an unexpected problem as he only speaks German but fortunately my wife is a polyglot and speaks six languages one of which is German. So she translated for me.

I also meet his brother who was very friendly and fortunately speaks English, and we talked while he and my daughter fed the animals.

Overall pet shops have not done well in Germany in the past few years; they used to have 3,500 but now only about 2,000 exist. Although you would not see any economic trouble in this store, as it was full. It started 40 years ago as a very small shop. The whole philosophy now of the shop is to make it a destination store, as although they are big in Internet sales, they prefer direct sales partly as they get paid immediately as opposing to waiting two to three weeks to getting paid. for example when they feed the animals they make it a public demonstation as here.

I took a lot of notes, pictures and got quite a few ideas for our software.

Here are some pictures, and I hope you enjoy them.

Like everyone in the newsagency industry, I look forward to seeing the latest Audit Bureau of Circulation (ABC) figures although I do confess with less enthusiasm than before

It is split into two sections newspapers and magazines, of course, my main interest is in the newspapers where the same patterns I reported last time showed up again.

Print circulations of Australian newspapers sales decline has continued. Probably the worst hit is Fairfax.

I graphed the print circulation from 2010 to 2015 by title based on current circulation so the big circulations are on the left and they get smaller as you move to the right.

There is no real pattern, they are all down; the average is 30% down over the five years.

Magazines because they are lower in circulation, they tend to deviate more but the result is down.

Looking at the figures I cannot see any switch to be digital. So despite years of effort and large sums spent, neither newspapers nor magazines have significant numbers of digital subscribers as few are paying for what they can get for free on the net. So with newspapers, there is the added problem, as the average age of a reader for print is going up, the newspapers are looking at a demographic nightmare. What is keeping them going for now is print.

For newspapers, you can get further information here. Its got a nice graph on the bottom which is worth studying.

For magazines, click here

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}

I strongly believe that every serious business and organisation today needs a web presence. The web has become the major means of communication between business and their clients.

One place you have to be in is Facebook as every day, 10 million Australians are active on Facebook. Many spend almost two hours a day on it.

And it is free.

If you are not there, I recommend you go to Facebook, see what a few similar businesses to yours are doing on Facebook now. Check the ones you like and take a few notes about what your business needs. Note the words you need to say.

Then take a good camera, someone associated with your shop must have such a camera or failing that use a top smartphone. Now give the shop a clean, tell everyone to get nicely dressed tomorrow and take heaps of digital photos of shop, you in the shop, the staff, the shop, the products and services. You will not be sorry if you take too many, only if you do not have enough. Now go through them and select the ten best.

Now find the pages of your suppliers, similar businesses, your own and some other pages that would interest your clients, check out what they do, the details required and note these down. Change it to what you need for your business.

With so many Australians already on Facebook, the odds are that someone associated with your business knows how to set up a Facebook page.

If you are stuck and are a client of ours, we offer a free service to help you.

Now go to Facebook and set up a page. In my experience, it takes people about an hour to set up. If you do not know what you are doing it’s a pretty full-on hour. If you make a big blunder, do not be worried as you can correct later.

Once this is done now push your page on your clients. Ask them to like your page. Put a sign up the front of the shop, “Like us on Facebook." Put a similar message on all your receipts and statements. Push the page to all your VIP members, your staff, etc.

Now every few days check out the pages you noted above. Share or cut and paste an interesting comment from one of these. Please if you do a cut and paste make sure you change it so it becomes an original piece. Furthermore, add every now and then something interesting from your store, for example, a new service you are offering, an award you won, a new stand, new items, etc. Doing this will probably take you about half an hour a week and while you are doing that you will, in addition, keep you abreast of current affairs in your marketplace.

As an added bonus, our clients can integrate this Facebook page in our point-of-sale system.

Now if you want something more like an integrated website available through our point-of-sale system, stay tuned as I will discuss how you can do this in my next article.

Many of our readers will be struck about how similar the new Woolworths reward program is to our standard loyalty program. It's no accident, what happened was just before we designed the program, We went to a conference which largely dealt with loyalty programs. As we listened to what these experts from some of the largest convenience stores in Europe and Australia such as 7-11, Telstra and Optus said we took notes and later used their ideas to make our adaption. Presumably Woolworths listened to the same experts.

You can see how it works here, and as you can see it's exactly the same as ours.

You must have a card and to get it you must supply Woolworths with your personal details. This is because the value of the customer monitoring, email addresses and information is considered to be worth 1% and Woolworths are not giving that 1% up.

Then when you purchase selected products, in their case the items marked with an orange ticket, your account collects Woolworth's dollar (points) on your card.

When your account reaches in Woolworth dollar (points) $10, you get $10 off your NEXT eligible purchase. There is no part payment accepted like some rewards programs have.

If you do the figures, it works out to for every $800 of purchases, their customer will get back about $10, or 1.25% assuming they do redeem it. In practice, many do not redeem it so reducing the cost somewhat.

The payout figure itself is not surprising as 1% cost as I stated is about what most loyalty programs work on.

Note the Woolworth rewards program is not going; I am sure to cost Woolworths 1% as I can guess who will be forced to pay for it!

Here are some links with more information.
 

http://mumbrella.com.au/woolworths-faces-protracted-battle-to-maintain-…

http://mumbrella.com.au/woolworths-axe-qantas-frequent-flyer-points-rew…

http://www.dailytelegraph.com.au/business/companies/woolworths-ditches-…

The system itself is a tested and proven system and is available to all our clients in our software.

Looking at the latest report, digital has at the moment almost overtaken print. In some newspapers like the Sydney Morning Herald, it already has we are at 50/50 now. Compared to the same period last year, digital is approximately 10% up and print is 10% down. they are about equal. If this trend continues, how long do printed newspapers last?

You can see the numbers and discussion here.

Overall magazines are down about 6% which is better than expected.

Most of it in the weekly magazines where the fall is on the majors about 8%. You can find a discussion here.

The non-weeklies are all down with massive variations in circulations. You can see the figures in the ABC circulation report; I quoted earlier, and a discussion is available here.

30% of Hubbed has just been sold to Singapore Post for $4.3 million dollars.

Singapore Post is one of the largest in world and is well placed in Australia to expand. Among other things in Australia, it owns Courier Please, which is Australia’s leading metropolitan express parcel delivery service with nationwide operations in Brisbane, Gold Coast, Toowoomba, Sydney, Canberra, Central Coast/Newcastle, Melbourne, Bendigo, Ballarat, Geelong. Carrum Downs, and Adelaide.

This I am sure will mean quite a lot to the 680 newsagents who by way of Hubbed provides a parcel delivery service in every major city across Australia. Included in this announcement is an expansion in Hubbed e-commerce delivery service to Australian customers using Singapore Post plus a new product for parcel drop-offs and sale of delivery products. It will also mean an expansion of Hubbed's customer base as Singapore Post huge customer base will be entering the Hubbed network.
 

The MPA has announced here that its proposed tests will start next month with 20 shops has been approved by the ACCC. What they are going to be doing in these 20 shops is providing better and more restricted distribution and retail advice. I expect that it will be extended to another 20 shops soon after that only with the better and more limited distribution with no retail advice. The idea here being to compare how good the MPA retail advice actually is.

This does suggest to me that Alf Maccioni, CEO of the Australian Newsagents Federation, was right from the start with his comments of the reality of the situation with magazine distribution.

The ANF here 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 am not going to comment on the last point, I do feel that 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 too that the reduction in sales in mainly due to the higher unit costs of tobacco, although I would add that the drop magazine sales is also having a major effect on tobacco sales with their members.

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

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

Today substantial numbers of Australian retailers are issuing and selling their own pre-paid gift cards. This market is thought to be worth at least $1 billion a year, and it is growing at 20% per annum. What makes it, particularly profitable to retailers is that a large number will not be claimed.

In general, Australians seem to love these gift cards as their recipients can pick their own gift. I know from personal experience. I could not figure out what to buy my niece. So I brought her a $100 gift voucher and gave it to her, with the words "Its no longer my problem what you want it's your problem."

Many of my clients now use our point-of-sale system to sell their own gift cards. It's a simple function on the main menu. Press a few buttons and out prints a gift voucher.

Nor is it hard to advertise, all you need is a simple sign to remind your customers that you have them. Note if you have a website or facebook page, I suggest you put it up there too.

The most popular gift card denomination is $25 followed by $50.

Here are some tips that people use that sell gift cards.

1) Entice buyers with a bonus say 10% to use for themselves. So what you do here is for a $50 gift voucher, you issue a bonus offer of $5.

2) Rather than give charity money, give them a gift voucher to entice them to shop with you.

I think you will find most gift card buyers, and recipients good customers some studies show they buy about 30% more with the gift card.

Marketing your own gift cards adds another opportunity for shoppers to buy and our system can do it for you.
 

Update: here is an interesting article that among other points discuss one of my clients use of gift voucher (link removed).

In an industry rocked recently by one very expensive court case Nextra Australia Pty Limited v Mark Timothy Fletcher we now have another one. The ink wholesaler Tonnex has gone into liquidation following an unsuccessful court battle against Dynamic Supplies. After losing the appeal, the liquidator stated that the directors decided that they could not cover the cost order and damages against them, so they went into voluntary liquidation.

What is amazing is that they did go to court as they were offered an opportunity to avoid it.
 

Are these expensive court cases worth it?

I spoke to the liquidator today, thinking that someone had brought it but was told that the assets were sold, so it is gone. I was stunned as they were a long-term major supplier that we had dealt with for years with offices in many states.
If you need to discuss alternate ink suppliers, please call.

I was talking to our supplier of video security today and he discussed some of the latest research from the US. I thought some it would be very interesting to my clients.

Its a survey done in the US of 23 large retail companies with 23,204 stores having over $660 billion in retail sales in 2013 compared to 2012. According to the latest study, currently, about 30% of all stock shrinkage is estimated to be theft.

On average, dishonest employees steal 5.4 times the amount stolen by shoplifters ($706.21 vs $130.89).

I will be speaking soon about some exciting new functions we will be introducing to help our clients which we are very excited about.

 There are problems in checking publisher subscriptions' credits. The main two problems are: 

1) Newsagent is delivering to addresses they should not be and are not being credited.
2) Publisher details are incorrect and newsagents are not being credited correctly.

Please click here (link removed) for details.

Note we now have a program to automatically check these details with News Limited.

http://www.theaustralian.com.au/national-affairs/policy/labors-plain-pa…

More evidence is coming forward that plain packaging of cigarettes has failed as new sales figures for tobacco after the first year is showing sales are up.

As I stated here before it came in, it will cause a switch to cheaper brands. This is what has happened.

Since the legal price has gone up, I am confident that the illicit trade of tobacco in Australia is up a lot. Particularly, as its packaging is much nicer than the lawful plain packaging which is a shocker. As a result today, Australians are smoking slightly more.

I think that the people who advised and those that push this policy have some explaining to do. Large sums of money were spent on the conversion and 10, 000s of people were and still are forced to do a lot of extra work for what is now a zero or worse. They cannot argue that they did not get proper advice as many submissions were made before it went live, outlining these problems, the problem is they did not listen.

News Corp has released their long overdue review here in all regions except for Tasmania, Alice Springs, Cairns and Townsville which we are still waiting on.

An FAQ explaining many of the points is here.

The most important detail we see is that they are offering a three-year contract. This is something we have been saying the industry needs since the failed T2020. The effect of T2020 has been that many buyers have been reluctant to move because of uncertainty in the industry. As such prices of newsagencies have fallen much more than they should have, Not only that but this announcement gives banks and finance companies more security in lending money to newsagencies. This contract gives certainty.

The other point we liked was the margins will remain the same and in fact, slightly better. A drop in margin would have hurt the industry, way beyond the financial.

Overall we see it as a good plus.