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.

There seems to be a lot of interest again in this newsagency case since Lexology, the major legal site for the world's leading commercial law firms, published a new article on this case Nextra Australia v Fletcher.

The article is available here in the orginal, but I noticed that it is widely circulated in such publications like the Franchise Bulletin here. This is actually where most newsagents are reading it.

What the is saying is that if you do run a social media even in only personally it may have a *commercial* character and as such breach Australian Consumer Law. If you do have a personal Facebook page, blog or twitter account, or if you are thinking about starting one, it is worth reading this article.
 

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.

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

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

Since the legal price has gone up, I am confident that the illicit trade of tobacco in Australia has increased significantly. This is particularly true because tobacco's packaging is much nicer than the lawful plain packaging, which is a shocker. As a result, Australians are smoking slightly more today.

I think that the people who advised and those who pushed 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 that 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.

Overall their audit showed a 4.8% drop in magazine sales which is less then newspapers. Magazine companies have certainly not given up as the number of titles went up.

No real pattern I can see except that the biggest drop was in weekly.

I think Pacific would be overall pleased with the result in tough retail times their drop was only 1%.

You can get a copy of the report [Link removed from site] here and make your own conclusions.

The latest circulation figures from the ABC are now the OCT-Dec 2012 figures.

Most worrying is that newspaper circulations have continued to decline, and the rate of decline is still accelerating. Currently, it is 6.5% down on the same quarter Oct-Dec 2011.

Looking at the figures, much but not all of the decline is in Sunday papers, Fairfax (who must be very worried about these figures) and NSW.

It is also clear that the number of major newspapers in each region is not declining as much as the number of minor newspapers. This shows that the trend for one newspaper town is growing.

A list of instructions for Paper changes for 2012 Christmas and New Years' periods are available. If you require further assistance with changes to papers, please get in touch with the PosSolutions Help Desk at (03) 9597 7222

The publishers of Australia have just released their first Australian magazine publishing survey.

I think most readers here will find it interesting. One point that I thought was fascinating was that 68% felt the newsagency channel was important.

The the ppt presentation is available here.

The executive summary here.

[Links were removed]

[LINK REMOVED]

Tony Philbrick who is the manager of South Bank Beach news and Alf Maccioni, who is the CEO of the Australian Newsagent's Federation discussed with Steve Austin from ABC this morning the new News Ltd T2020 plan to consolidate delivery areas.

I think the big issue for newsagents was brought up here finally, what will be the effect of loss of circulation on shop sales in the newsagency?

Rent in Europe is very expensive as such newsagencies there tend to cram.

As I wrote earlier greeting cards are very small.

Lines that is much bigger than in Australia are children toys, which tend to be everywhere and smokes. It is smokes that is the growth industry in Europe in newsagencies.

One point is we have a unique service for our clients that can allow us to examine their data to suggest possible improvements. One department that comes up a lot is the drink department, our data checks suggest that Australian newsagencies are not doing, as well as they should in drinks. European newsagents must have got this message as they are much bigger in drinks then Australian newsagencies.

Here are some pictures

[Removed]

In Pinewood newsagency, a large section of magazines area have been replaced by mobile and ipad cases

Here are some pictures

If you want to know more please contact

Cyril
Neeto - The Pines
Shop 32/181 Reynolds Road
Doncaster East Vic 3109

Ph: 03 98427944
Fax: 03 98424229

GNS had offered newsagents a website for ecommerce free. We have been doing a review of this site on behalf of our clients. Although this review is still going on, it does appear that with the latest improvements that it was now good. What I particularly liked was the ability for the newsagent to upload his own stock. I also thought the school book section was good too.

We will be coming out shortly with some more tools to make it even better for our clients.

The big plus of course for our clients is that the GNS website is free. No one percent fee plus extra fees like so many other sites and packages charge.

Another free site I recommend all our clients use is facebook but I will discuss that later.

Update 22/9/20: The YourNewsagent website nolonger exists

I will be there right near the GNS stand.

I think it will be well attended, the 2012 GNS WA Market Fair, showed attendance numbers were up on last year. That was despite the rain.

At 4:30 PM EST today, Derek Hinch will be interviewing Eugene Ahern from Nextra Bulleen Plaza newsagency in Melbourne on the drive programme about the HWT consolidation program.

There is a lot of comments about the latest proposals from HWT called T2020. 

I actually was interviewed extensively about it by the HWT consultants before they wrote their report. Parts of what was being proposed I heard from my clients too.

Many are looking at this proposal and seeing their margin dropping from 25% to 12.5%. That is a big blow to some. Interestingly for some like my client interviewed about it in the daily telegraph here, margin will go up by 2%.

The core of the proposal is that they intend to replace many newsagencies with one newsagency. This agency they propose will deliver 10,000 newspapers a day.

That would be a substantial entity which would need to cover a lot of territory. As a punt depending on the size of the area, probably 10 to 20 staff looking after about 4,000 active customers (so you could double that to 8,000 customers on the books) together with about 200 subagents.

We have a few clients with those sort of figures. To do such a job would require a substantial setup cost, a depot, trucks, plastic wrap machines, a good computer system, etc. Anyone planing to do this would require a lot of money upfront probably the cheapest way to do it would be for many newsagents to voluntarily merge their runs. Much of the equipment these people have will be useless soon anyway.

One problem here is that the mapping of these areas are to be done by HWT. These areas will not follow the existing territories. This means that it will be harder for a voluntary group to be created.

Some other points that I did not like were the areas are assigned by tender, as such there is no-good will. If someone created such an entity, lost the tender the next time it comes around, then they would lose all.

No compensation to people that have existing territories and that are going to find their newspaper margins slashed in half.

Another issue is what is going to happen with Fairfax. It is marginal enough for many newsagencies now to do Farfax with HWT. If the agencies have no HWT to deliver many are just going to drop Fairfax. Many Fairfax subscribers could be left with no deliveries.

One issue I would like to see discussed which is briefly brought up in the FAQ is

Q: Once T2020 is implemented, there doesn’t seem to be much to differentiate a retail newsagent from a sub-agent. What will News Limited to do to distinguish a retail newsagent?

A: We will continue to invest in the branding and in-store merchandising solutions for retail newsagents that differentiate newsagents from other channels.

I suspect that this and other questions are not needed to be worked out as clearly, they have already been decided.

http://blogs.abc.net.au/queensland/2012/08/narky-newsagent-shines-light…

You can hear here a discussion in the ABC over one newsagent who facing a slowing down of newspaper sales, who has been sending messages to customers pleading with people to buy some stationery, biscuits to keep him in business.

After Fairfax's recent announcements here, everyone in the newsagency industry was waiting to hear what News Corp had to say. The only ones talking were the doomsayers who predict calamity at every opportunity.

Well, News Corp's announcement today was not bad for newsagents. It is what I wrote earlier here that would happen. They are committed to print.

Newspapers are profitable to News Corp. They stated, “We believe in print and are committed to print. We still sell around 11 million newspapers a week. Advertisers still find huge value in print.”

Like Fairfax, they are going to be standardising their papers nationally. A local newspaper is becoming a national newspaper with some local content added.