A blog on issues affecting Australia's newsagents, media and small business generally. More ...

Author: Mark Fletcher

Lotterywest launches Better Business Program for newsagents

With the backing of the WA state government, Lotterywest has launched the Better Business Program.

The program will see $4.5 million delivered annually to provide support to our retailers for at least the next three years.

  • $3.5 million in Business Support payments directly shared among around 500 small local businesses.
  • $500,000 in dedicated support services for retailer businesses such as sales coaching, visual merchandising and adapting to changing customer spending habits.
  • $500,000 in Sales Sprints where you can earn rewards.

Here is the announcement email sent to retailers:

Introducing the Better Business Program

Yesterday we launched our Better Business program at the State Reception Centre Kings Park. It was fantastic to see so many of you there, both in person and online to hear the Premier, the Hon. Mark McGowan MLA, make this exciting announcement. Click here to read the Premier’s letter endorsing this program.

This program will see $4.5 million delivered annually to provide greater support to you, our retail network for at least the next three years.

The $4.5 million investment will include:

  • $3.5 million in Business Support payments directly shared among around 500 small local businesses.
  • $500,000 in dedicated support services for retailer businesses such as sales coaching, visual merchandising and adapting to changing customer spending habits.
  • $500,000 in Sales Sprints where you can earn rewards.
  • The program is launching today, with Support Payments back-dated until January 1 2023.
We’ve created the Better Business Guide and this video to explain how the new program will work.

All retailers are eligible to receive their share of Business Support. To ensure you don’t miss out on your payment, you’ll need to meet Business Standards. We aren’t introducing any new standards; this program will ensure we are focused on what’s most important. We want you to receive your payments each quarter and will work with you to resolve any issues.

We’ve included an amnesty period until 30 June 2023 to give you and us time to adapt to the changes.

This greater financial support is due to the overall growth of Lotterywest’s sales.

This program aims to help build more resilient and adaptable businesses.

There is more to do, including continuing to invest in our online presence to remain competitive and provide access to players how they want, but this won’t be at the expense of the retail network. We’re committed to ensuring our retailers remain resilient and well supported into the future. Together, we will continue to make a big difference to the WA community, which we should all be proud of.

Your Retailer Relationship Officer is available to answer any questions you have. We have uploaded digital versions of all the above resources to Retail Link here. You can also contact our Customer Services team on 133 777 or contact@lotterywest.wa.gov.au.

Kind regards,

Ralph Addis
CEO Lotterywest and Healthway

It’s a terrific initiative and while I think newsagents should have been engaged in change long before now, it is not too late.
6 likes
Newsagency management

Hey Aussie magazine publishers, it’s not that hard to pitch newsagents to those interested in your magazine

Here’s what I found on Twitter this morning in a few seconds. Nothing from Aussie publishers that tags newsagents.

I could go on.

These examples show publishers and journalists promoting magazines and newsagents. It’s easy to do, free and helps attract readers.

6 likes
magazines

Must read: Inside Australian Online Shopping 2023

Inside Australian Online Shopping 2023 was released yesterday by Australia Post. It is a must read report for any retailer.

It is packed with data and insights relevant to all readers, including small business retailers. There is one key data point that should focus the attention though:

How much revenue in your business comes from online?

It is not too late to get into online and be successful. Retail newsagency businesses are, I think, well placed to do this for several reasons:

  • Space.
  • Infrastructure.
  • Skillset.
  • Appetite for growth.

The challenge is where to start, what to sell? While it’s on you to determine this, it is something people can help with.

I urge all newsagents to read the Australia Post report and consider what it could mean for your business.

I have been selling online through my retail newsagency businesses for ten years. I’ve had failures, and successes. Looking out over the horizon I can see plenty of opportunities.

2 likes
Newsagency management

Wednesday March 22: Free workshop for newsagents – how to sell online

Join me for a free workshop Wednesday March 22 @ 2pm Melbourne time:

Websites for newsagents.

March 22 @ 2pm (Melbourne time).

Let’s look at:

  • What’s working.
  • What people are looking for.
  • Where to start.
  • Why it does not need to reflect your newsagency.
  • How to do it for the lowest cost possible.
  • Risks and how to avoid them.

Anyone is welcome to attend. While my POS software company develops websites for retailers, including newsagents, this is not a sales pitch. The advice shared will be useful to anyone, regardless of supplier.

You don’t need to book. Just turn up. 2pm Melbourne time March 22.

https://us06web.zoom.us/j/88276032133?pwd=cWgzYjFQaVRPM3diVUNnWjd6L1pqZz09 Meeting ID: 882 7603 2133 Passcode: 207681

I will record the session and decide later if I make the recording available.

You can access this Zoom from any device, anywhere. Having a camera is ideal for participation.

It is common for people joining a session like this to be a voyeur, to watch, and not actively participate. The best value is achieved through participation. No question is wrong, or ignorant. Ask away. It’s likely that what you ask others want asked as well.

Why newsagents need to have an online strategy.

The history of our Aussie newsagency channel is rooted in serving locals, in the local community, through newspaper and magazine delivery.

For too long, we have played purely local and while that may feel nice, it does not maximise the return we can achieve.

Every dollar you make from someone who lives hours or days away from your shop is icing on the cake, bonus revenue. And, because of data collected from online sales, it is easy to win more sales from online shoppers.

A smart online business leverages at the very your existing labour and space investment. This improves business efficiency. I have not listed inventory investment here because some of the best online businesses I have seen started by local retailers, including newsagents, are for new product categories that are not reflected in the shop.

A focussed modest online shop offers you a place to reach more customers, sell when you are closed, make better use of existing resources and make your business worth more every day.

An online shop in your newsagency is smart business.

Too many newsagents overthink this. They spend too long and too much money planning and designing.

A common mistake is that they think they need to put what they sell in the shop online. While in some circumstances this makes sense. Most often it does not make sense.

The carpentry adage of measure twice cut once does not fit website plans and development. When it comes to websites, my advice is launch early and launch often. Failing is good if you learn, recalibrate and launch again.

I have had websites connected to my retail newsagency businesses for many years. Most are successful. This is thanks to the failures.

Join me for this free workshop if you don’t have a website today.

2 likes
Newsagency management

Advice on reducing visual noise in your retail newsagency

How many times do you wonder why shoppers have not seen a sign, why they can’t find products you think are easy to find or expect you to sell something you have never stocked?

Shopper blindness is a common discussion among local small business retailers.

I don’t think shopper blindness is the issue. I think it is that we overwhelm them with information, colours and displays. We give them too much.

In 2023, we are in an era of retail where less is more. This is an era of the retail edit, where people can more easily see because of what you hav edited out.

  • Edit. Stand at the front of the shop and review your signage and edit the mix.
  • Posters. Do not use magazine or newspaper posters. There is no evidence doing so increases sales.
  • Housekeeping notices. Have all customer notices in the one unobtrusive place.
  • Call to action signs. If you have items on sale or discounted, place them all in the one clearance location.
  • Product signs. For product signage in-store, be consistent in style and look. Smaller signs next to products will work better than big signs from the ceiling – how often do your shoppers walk in looking up anyway?
  • Colour block. Colour blocked product is more appealing to the eye, it looks less messy, less noisy.
  • The counter. Edit for focus on the messages that really matter.

Reducing visual noise will improve the experience for your shoppers and for those who work in the business. It will focus everyone on what you decide matters the most right now.

Keep

It

Simple.

6 likes
Management tip

Sports Entertainment Network ditches newsagents in AFL Record changes

Aussie newsagents have done a terrific job getting the popular AFL record in the hands of AFL fans. But, no more following a decision at Sports Entertainment Network, the business that publishes AFL Record.

Back to grounds only, as it was pre-COVID but all editions are available for purchase online.

That’s what they say, and, for sure, it’s their decision to make. But … our channel is a destination for AFL team merchant including calendars, decals, plush and car stickers. It’s a space in which we do well – helping AFL fans across the country stay connected to the game they love and the team they love.

It is disappointing that the folks at Sports Entertainment Network chose to not tell newsagents, leaving us to field the questions, and the frustration.

They have asked newsagents to tell their customers to go online. Hmm, no thanks.

8 likes
magazine distribution

We play a role in the newsagency channel narrative

Every time we talk to someone, anyone, about our business, retail, local small business retail, anyone, we add to the narrative about our channel, local retail, small business retail – in addition to the narrative about our business.

When speaking to the media, journalists in my experience come to us with a bias about our channel and about local small business retail, unfortunately.

“Business owners, nowdays after COVID-19, we are not making any money. Please don’t do this,” Singh said.

This is a quote from a newsagency owner, from a story by 9 News in Melbourne about a newsagency that was robbed.

I get the emotional feelings following the break in would underpin anything said. The journalists would know this. I also get there is no point saying we are doing fine when being interviewed about a robbery.

The quote does nothing for the narrative of newsagency retail or local small business retail in general.

Our choice.

All of us who own newsagencies have chosen to do so. We have made that decision. Just like we decide who works for us, what we stock, how we display it and how we promote our businesses.

These are all our choices.

The performance of our business is a consequence of our choices.

If business is tough we need to respond. If what we respond with does not work, we need to change our response. We need to keep changing until we can change no more because of time, resources or will.

The thing is, our business reflects us. We choose how we present ourselves, and that can impact others that trade in similarly named businesses, no matter how different our businesses are.

I know of many newsagents doing well. Most newsagents I speak with had a good Covid. Plenty of newsagents are making good money.

I get that there can be local circumstances that beat against the pursuit of success. Online can help play outside that, and online has been an active option in our channel for more than ten years.

I also get that personal financial circumstances can dictate what we are able to do. However, we chose to be in business.

Here are some truths about newsagency retail in Australia today. While I accept people may disagree, on these points I have seen enough data to know they are true:

  • You determine who notices your business based on the products you carry, where and how you display them and how you promote them outside the business.
  • Convenience retail is not successful for independent newsagents.
  • Value retail, like what you see in a discount variety store, is not successful for independent newsagents.
  • Tobacco has no upside, no benefit for retail newsagents.
  • Vape products have no upside and will limit your shopper reach.
  • Everyday confectionery at the counter is far less successful than more unique and higher margin items.
  • Newspapers work just as well in a less expensive location than the high-traffic front of the shop publishers want.
  • Greeting cards is the best margin category in your business and it is the one that responds best and fastest to your attention.
  • $1 and $2 cards deliver little, or, usually, no financial value to the business.
  • While agency business brings people in, in too many situations that foot traffic is not adequately leveraged to valuable retail sales.
  • Newsagents can sell gifts at $200, $300 and more apiece.
  • You are not your customer.

I could go on.

In truth: if we are finding business is tough, if we are not making any money, doing the same thing over and over will keep us in that rut.

29 likes
Newsagency management

Free online workshop: Websites for newsagents

Join me for a free workshop Wednesday March 22 @ 2pm Melbourne time:

Websites for newsagents.

March 22 @ 2pm.

Let’s look at:

  • What’s working.
  • What people are looking for.
  • Where to start.
  • Why it does not need to reflect your newsagency.
  • How to do it for the lowest cost possible.
  • Risks and how to avoid them.

Anyone is welcome to attend. While my POS software company develops websites for retailers, including newsagents, this is not a sales pitch. The advice shared will be useful to anyone, regardless of supplier.

You don’t need to book. Just turn up. 2pm Melbourne time March 22.

https://us06web.zoom.us/j/88276032133?pwd=cWgzYjFQaVRPM3diVUNnWjd6L1pqZz09 Meeting ID: 882 7603 2133 Passcode: 207681

I will record the session and decide later if I make the recording available.

You can access this Zoom from any device, anywhere. Having a camera is ideal for participation.

It is common for people joining a session like this to be a voyeur, to watch, and not actively participate. The best value is achieved through participation. No question is wrong, or ignorant. Ask away. It’s likely that what you ask others want asked as well.

Why newsagents need to have an online strategy.

The history of our Aussie newsagency channel is rooted in serving locals, in the local community, through newspaper and magazine delivery.

For too long, we have played purely local and while that may feel nice, it does not maximise the return we can achieve.

Every dollar you make from someone who lives hours or days away from your shop is icing on the cake, bonus revenue. And, because of data collected from online sales, it is easy to win more sales from online shoppers.

A smart online business leverages at the very your existing labour and space investment. This improves business efficiency. I have not listed inventory investment here because some of the best online businesses I have seen started by local retailers, including newsagents, are for new product categories that are not reflected in the shop.

A focussed modest online shop offers you a place to reach more customers, sell when you are closed, make better use of existing resources and make your business worth more every day.

An online shop in your newsagency is smart business.

Too many newsagents overthink this. They spend too long and too much money planning and designing.

A common mistake is that they think they need to put what they sell in the shop online. While in some circumstances this makes sense. Most often it does not make sense.

The carpentry adage of measure twice cut once does not fit website plans and development. When it comes to websites, my advice is launch early and launch often. Failing is good if you learn, recalibrate and launch again.

I have had websites connected to my retail newsagency businesses for many years. Most are successful. This is thanks to the failures.

Join me for this free workshop if you don’t have a website today.

8 likes
Newsagency management

Is declining trust impacting newspaper sales?

While we all know that digital platforms are disrupting print newspapers, I wonder if declining trust is impacting print as well.

In the recent federal and Victorian elections we saw print newspapers that lobbied for a result failed to make an impact for their chosen candidates, demonstrating that once great mastheads that could decide an election outcome no longer have that clout.

Every piece of lobbying dressed as ‘news’ further challenges trust.

A few days ago, the Launceston Examiner newspaper was caught publishing a letter that was found to contain a made up claim on a serious matter.

Key points.

  • A letter published in a major Tasmanian newspaper claimed a man undressed in front of children in the female changerooms at Launceston aquatic centre — but the pool has denied this ever happened

  • The following day the newspaper published a clarification, saying “unfortunately we appear to have been misled”

  • The editor of the newspaper is a former adviser to former PM Malcolm Turnbull and failed Liberal candidate Katherine Deves

The letter claimed that a male entered female change rooms at a pool and started to undress, and ‘wrote’ to the newspaper over trans related concerns.

The council has quickly confirmed that the incident did not occur.

The newspaper editor claims to have spoken to the letter writer. I think she made it up, he has said.

If there is such a letter, and that is a big if, the editor has failed to appropriately check prior to publishing. This is where repetitional damage is done to the Examiner.

The Launceston Examiner is not alone. News Corp. outlets have a reputation in this area I think. And, it leads me to wonder if these games of political and public opinion interference diminish trust in the medium and whether that is a factor in declining print newspaper sales.

I mean, do people want to pay to be told what to think?

11 likes
Ethics

Poynter: Where have all the magazines gone?

Where have all the magazines gone? is an article by Samir Husni published by Poynter about the decline in magazines on newsstands in the US.

Magazine publishers, folks who work in distribution and retail newsagents will find this article interesting even though it is a US perspective.

In 2014 I wrote an obit for traditional newsstands in America — stores that sold mainly tobacco products and magazines — and about the birth of a new newsstand in grocery stores and bookstores. Tremendous change is now taking place at those new newsstands, which already look nothing like they did just a few years ago.

Though the newsstand was the most visible sign of a magazine, newsstand sales were never a major factor in the circulation strategy of the larger audited circulation publications. The strategic importance of newstands has only shrunk. Newsstand sales fell from a high 35% in the late 1970s to less than 10% in the early 2000s to a mere 3% of the total circulation today. A magazine like Time, which sells almost two million copies, now has very little presence on the newsstands. Overall, the newsstand industry went from about $6.8 billion in revenue in 2006 to about $1 billion in 2022 in a major drop following many changes that can be summed in one word: consolidation.

Consolidation took place in every segment of the magazine media business: publishers, printers, distributors, wholesalers and retailers. With no exception, and to various degrees of volume, each of those industries saw mergers and acquisitions resulting in fewer publishers, fewer printers, fewer distributors, fewer wholesalers and fewer retailers, which, in short, means fewer magazines available for the general public to pick up and buy at retail.

Magazine sales growth is there for the taking in Australia, especially in titles outside the top 200. I am confident that newsagents who want to specialise, those with 1,000+ titles on their shelves, could easily achieve double-digit growth is we had genuine and easy control over the range of titles we receive and the quantity.

That in 2023 we do not have this is a key factor in holding back magazine sales in the magazine specialist retail newsagencies.

Husni’s article is worth reading. It ends on a note relevant to us here in Australia.

My own stats show that the annual number of new magazines has shrunk, too, from a high of 535 in 1996 to a low of 74 in 2022.

But Linda Ruth, an industry consultant and founder and president of PSC Consulting, said that the “special quality, special interest vertical publications are actually growing.”

“The newsstand has become a niche category,” Kotok said, with the high titles selling less than 300,000 copies an issue, a far cry from the 12 million copies that TV Guide used to sell in the late 1970s.

I think it is relevant for newsagents who specialise in magazines and rely on range see ourselves as niche. This means focussing more attention on those specialty titles rather than on the mass titles that are available everywhere else … leave those to the supermarkets who only promote when paid to do so by the publishers.

Poynter is a excellent and trusted resource on news and journalism.

8 likes
magazines

Let’s not get sucked in by downcast sales forecasts from big retailers

Some big retailers are predicting flat or declining sales through 2023 and into 2024. There are forecast reports of comp (comparable) store sales, we tend to call these same store sales, of 3% to 5%.

The challenge is that journalists and news editors hear this and attach the downward forecast to all retailers.

I know plenty of independent retailers, including independent newsagents, who are forecasting growth over the same period. Know, not massive growth, but growth nevertheless.

In my own stores, I am planning for 5% growth and hoping for closer to 10%. But more important than the sales revenue growth number is growth in business GP percentage achieved. Growing that several points is more important than revenue growth.

If you grew business GP% by, say, 3% and overall revenue by 1% the bottom line benefit to the business would be considerably magnified compared to no change in GP% and 1% revenue growth.

There are many growth opportunities in our channel, many opportunities for retail newsagents to achieve good growth in revenue and in gross profit percentage performance.

How do we achieve that?

Look at your current sales data, look for green shoots, indicators of opportunity for you. In a retail newsagency these are typically in cards, magazines and stationery. Sales in these departments can indicate opportunities outside of them, maybe in new areas for the business, better margin areas for the business.

I know of many retail newsagents where this approach of data lead range review and gross profile percentage growth is successful.

Covid.

One of the consequences of Covid was that many shoppers tried local retail for the first time in years. We showed that we offered diversity in products and personal service. We can continue to leverage these differences. But we have to show rather than tell.

Big retail looks like big retail. Their displays tend to be blah and their differentiator tends to be price.

In local retail, displays that are more fun, appealing and enticing can work well. back this with shop floor knowledge and genuine personal service and price is a secondary factor. people want to enjoy shopping. They want to walk out of the shop feeling good. That feeling is currency, it pushes pure price to a secondary consideration as value is felt in other ways.

The economy.

Yes, there is pressure in the economy because of rising interest rates. There is still plenty of money around for what people want. Want is a big driver for spending. It’s the emotional purchase where you have good opportunity. Especially as a skilled local retailer who is able to feed into the want.

You.

The reality is that there will be more tough economic news and negative reports about retail. You can choose to watch that and worry, or you can create the retail experience that is an oasis of happiness, a place locals enjoy and are happy to spend. Every day, choices you make in your business determine this.

If you do what you’ve done every day for years, your results will be what you are used to. I think the Aussie newsagency channel can do much better than that. 

11 likes
Newsagency management

I wish journalists and editors would do better in reporting on retail newsagencies in Australia

Merewether Newsagency in Newcastle closed a few days ago. The ABC had a terrific radio report about the closure, the history of the shop and characters worked in the shop.

The interview with the current owner focussed on the reasons for closure. Unfortunately, the decline and ultimate closure was tied to newspaper sales.

Smart newsagents stopped relying on newspaper sales ten years ago. Sure, we sell them. Sales are declining. Real margin is lower now than years ago.

Many decisions by newspaper publishers have told newsagents to not rely on newspapers.

I know of newsagents in small towns of 2,000 and even less people who are running successfully evolved businesses.

While the closure of any newsagency is sad for those involved and the community, there are many good stories out there about newsagencies that are thriving, and that’s a story that journalists and news editors appear disinterested in.

6 likes
newsagency of the future

The New Zealand Herald is a good newspaper

It’s good seeing a major city newspaper with a front page of news and not political lobbying, biased takes and Harvey Norman ads. The NZ Herald is what newspapers, particularly in Melbourne and Sydney, used to be like.

I am here today for the Gift Fair which, while small, was well worth visiting.

7 likes
Newspapers

Toy Fair in Melbourne is well worth the visit

I am grateful to have been able to visit Toy Fair in Melbourne yesterday. There was plenty to see, plenty of new products, plenty of show specials.

It runs through to March 8. If you have time and can make it, it’s well worth it as it shows a broad set of shopper reach opportunities beyond what has been traditio9nal for the newsagency channel.

The specials on good turning lines provide extra margin opportunities to make the time commitment, and travel, worthwhile. There are also plenty of opportunities to schedule deliveries through the rest of the year.

All in all, an excellent trade show.

2 likes
Newsagency opportunities

A credit card surcharge turns me off a retail business

Twice yesterday I experienced a surcharge being added to a purchase, in different retail businesses. In each case, the amount of the surcharge was not revealed until after I had presented the card and in each case the receipt I asked for did not include the surcharge.

Both businesses were selling items over which they had price control, good margin items.

Ian the first purchase I didn’t;lt notice the amount on the credit card terminals, and the staff member could not tell me the amount of the surcharge, only that there was one.

In the second situation, I saw that the surcharge was 8 cents as it showed on the screen, but it was not on the receipt from their POS software.

Applying a surcharge where the items have good margin and where the business can set prices does not make sense to me. It turns me off these businesses.

A bigger problem thous is the poor service of not adequately disclosing the amount of the surcharge and not documenting it on the copy of the receive they provide when requested.

If I was competing with these businesses their current approach to surcharges exposes a weakness that I’d, for sure, exploit.

I get that retailers don’t like credit card fees. At less than 1% of purchase value, they are a low cost compared to other business costs. For example, I suspect the 1% cost is considerably lower than the cost of theft in the business.

To me, a credit card surcharge applies a cost to a business service that actually has time saving and other benefits for the business.

So, yeah, I don’t like it, and I especially don’t like that it’s more often used in independent local retail than our big business competitors. The last thing we need is giving shoppers a reason to preference big retailers over our local indie retail businesses.

Too often, local indie retailers are grouped together on things like this, and that worries me – that enough local indie retailers apply a surcharge for card use to have some shoppers think we all do it.

I get that some want a way to recover the cost of card use.

  • Look at your prices. If you don’t round to .99, do it.
  • Look at your prices. Add a couple of % to markup on items that you can.
  • Reduce the value of the loyalty discount you offer.
  • Ask your card processed for a rate review.
  • Look at your dead stock. In plenty of retail businesses the cost of dead stock is a much bigger burden on a business than card processing fees.

My point is, applying a surcharge is easy and, I am sorry to say, lazy. There are other moves a retailer can make to claw that cost back.

17 likes
Newsagency management

It’s a pity Aussie magazine publishers do not use Twitter and other social media to generate interest in their titles

3 likes
magazines

Big retailers are expanding beyond their lanes, are you?

Two stories over recent days reinforce the extent of change in retail and remind all of us in local indie retail to consider change as well.

As I have written here previously, trading outside what has been traditional for your retail business is key to attracting new shoppers, to opening the appeal of your business beyond what has been usual for you.

Yesterday, Bunnings announced the addition of 1,000 pet related lines.

Bunnings gears up to be dog’s best friend with expanded pet range
Emma Koehn

Hardware giant Bunnings is hoping shoppers will add dog food and toys to their shopping lists when heading in store as the retailer launches a significant expansion of its pet merchandise business.

Bunnings will throw down a competitive challenge to specialty pet retailers, which have boomed since the COVID era, when it expands its range from a couple of hundred items to close to 1000 products from late March.

This is a smart move because the majority of pet related purchases are habit based and habit based shoppers are tremendously valuable. Their regular shop is valuable in the context of what else a business operates.

It’s kind of I told you so but around 5 or 6 years ago I suggested the pet category to newsagents.

The other move in by Chemist Warehouse, into optical.

Chemist Warehouse and Peter Larsen join forces to ‘disrupt’ optometry industry

MYLES HUME
February 15, 2023, 3:18 pm 847

The first store in Melbourne is the start of a mass rollout to take place in the coming years.
Australian pharmacy retailer Chemist Warehouse has entered the optometry market, opening its first store in the Melbourne suburb of Malvern and appointing prominent industry figure Mr Peter Larsen as its managing director.

On 15 February, Optometrist Warehouse announced it had opened its first location at 120 Glenferrie Road, with plans to “disrupt the industry” in the coming years.

“Initial expansion plans include the opening of a handful of stores in 2023, followed by a mass network rollout which will see Optometrist Warehouse become a household name and the go-to optometry service provider within the Australian market,” a press release stated.

I noticed the Chemist Warehouse move as one of their first locations is two doors from one of my shops.

These are thought out moves, designed to reach new shoppers, to strengthen existing, well-established, businesses. In each case they target product / service categories served by vertical businesses, specialty businesses focussed only on these niches. It’s those narrow-focussed businesses that are at risk.

This is why I think it is vital that any local indie retail business draws shoppers for many different reasons, and not just the usual 3 or for product or service categories that we see are typical in a newsagency business.

So, my question today is what moves are you making to attract new shoppers? You have to have made or be making moves because you need new shoppers, especially new shoppers who would not usually shop your shop.

Across at my newsXpress business we have been focussed on this for years – the need to attract new shoppers, especially the need to attract and serve habit based shoppers.

It’s not too late. There are plenty of opportunities. The moves by Bunnings and Chemist Warehouse should wake some local retailers up, and help them see the opportunities out there.

Retail is changing in 2023 at a faster pace than in recent years. We need to change.

11 likes
Newsagency management

Pressuring suppliers for a lower price could be false economy

I am writing today as a supplier to newsagents and other retailers. My newsagency software company, Tower Systems, supplies software to more newsagents than all other newsagency software companies combined.

The price of the newsagency software is the same for everyone, $185.00 a month (including GST) rented with no lock in period. You can have as many terminals as you want. Included in the Xero link, Shopify link, Tyro link, Smart Pay link, and plenty more.

A newsagent recently enquired about switching software. After the demonstration, they asked for a better price. Following some discussion it turned out that price mattered much more than what the software did, more than value and benefits they could leverage for their P&L through the software.

They came back a couple of times on price. In the meantime, another company they were talking with dropped their price twice.

We urged them to go elsewhere, and to not ask us again for a better price. Their obsession was wasting our time.

The relationship between supplier and retailer, whether it is for products or services, needs to be considered long-term and in the context of mutual business value more so than what it might cost today.

While there are suppliers desperate to cut prices to win business at any cost, they are unlikely to be the suppliers delivering the best value for their clients. They are unlikely to be the suppliers evolving in ways that benefit their clients.

There is no connection whatsoever between cheapest and best. Anyone chasing cheapest deserve what they get.

You only have to look at the value of a cheap generic tool that you buy from some big hardware business compared to the value of the more expensive brand name tool on the shelf next to it. In my experience, the more expensive brand name tool delivers more value.

While I understand why some suppliers give in to price pressure and discount, and discount some more, that action does not give them capacity to invest in a valuable relationship that better benefits their client and their own business.

This is true with product suppliers, and services suppliers.

While, for sure, you want to make sure that any price you pay is fair, pressuring for a discount just because you want to pay less without even understanding the value of a product or service does not make sense to me.

Our channel does not benefit from people chasing cheap. We are better off leaving that to the $2 shops, the discount variety businesses and other similarly awful cheap shops as the only thing they can compete on is price, and competing on price is a mugs game.

After note: this post is not the business one supplier thinks it is about. In typical fashion, they jumped at a shadow and landed in a puddle.

17 likes
Newsagency management

Some commercial landlords testing the boundaries of reasonable retail tenancy rent increases

Several newsagents have contacted me over the last couple of weeks concerned about rent increases, which have ranged from 5% to 15%.

While no one wants a rent increase, every lease I have seen documents the basis for any increase.

A couple of the situations outlined to me recently are outside what the lease allows, but the retailer needs to be prepared to take action to defend their rights, which they appear unwilling to do – they wanted someone else to do that for them.

The bigger challenge right now relates to market reviews. In plenty of locations, the market has moved from when current leases were negotiated, giving the landlord an opportunity, that plenty appear to be embracing.

The rights of a retail tenant vary state by state. It’s not difficult to determine what your rights are and the avenues for appeal and resolution.

My advice to newsagents and other retailers is to make yourself aware of your rights in your state or territory so that you can act on them, rather than relying on someone else to do it for you, maybe at a cost, or maybe with an interest other than your own. Sure, you can talk to your association, or hire a negotiator. I still think the tenant is in the best position to achieve something closer to what they want.

The best position to be in when rent is being negotiated is to be the tenant the landlord likes, trusts and wants. If you are not that, finding someone else may be more appealing to them. So, if you like your tenancy situation, pay on time, keep conflict to a minimum and help the landlord feel proud of their investment.

Through 2023 and 2024 I think we will see continued upward pressure on occupancy costs. In our day to day business decisions we need to mitigate against the impact of higher costs, so we have a buffer of protection.

13 likes
Management tip

Strong results for The Lottery Corporation

In the half year results released by The Lottery Corporation released yesterday there are some data pints that may interest newsagents.

The retail channel delivered continued turnover growth (up 3.5% on the pcp). Digital turnover continued to grow strongly (up 10.6% on the pcp) and accounted for 38.4% of all turnover in the half.

The TLC announcement attributes growth to jackpots, in particular, Powerball.

The note about EBITDA is interesting:

The EBITDA/Revenue margin improved from 18.8% to 19.7%, primarily due to the lift in digital share of turnover, a further step up in fees from the Jumbo reseller agreement and interest income on Set For Life deposits.

With the key being: primarily due to the lift in digital share of turnover.

Online is strong and growing, but the trajectory of growth appears to have slowed. This graph from Taylor Collison plotting TLC (and formerly Tabcorp) data shows:

I think a key reason for the small decline in percentage of revenue through the digital channel is the Powerball jackpots and that the infrequent shopper is more likely to purchase in-store than online.

For lottery retailers, jackpots are key to the return they achieve from offering lottery products since very busy lottery days offer an efficiency form which they can benefit.

Overall, the results for The Lottery Corporation are good for their shareholders.

I am sure that lottery retailers will appreciate the changes to remuneration that come into effect mid May 2023:

  • A commission increase from 10.3% to 12.3% of subscriptions – excludes Lucky Lotteries Super Jackpot, Lucky Lotteries Mega Jackpot, Instant Scratch-Its, Coin Toss and Keno.
  • A digital commission rate increase from 2% to 4% for GREEN, 1% to 2% for AMBER and no change for RED.
  • A sign-up bonus rate increase from 1% to 3%, irrespective of the outlet’s rating.
  • An increase in Powerball subscription by 10 cents from $1.10 to $1.20 with commission set at 12.3%.
7 likes
Lotteries

The gift trade show situation needs to be resolved

The Sydney gift fair this past weekend and into this week has ranged from awesome to dreadful depending on the person sharing their opinion.

That it is three different shows over two separated locations is a key frustration, with no obvious reason for a supplier being at Homebush versus the city.

For those with limited time, getting to the three events is challenging.

The geographic split diminishes the value of the show I think.

The other issue for me, from a supplier perspective, is a bigger geographic split. I’d prefer to see gift fairs concentrated to one city, and held twice a year, like in most other countries.

Gift fairs in Melbourne and Sydney add unnecessary cost to suppliers, meaning retailer buy prices are not as low as they might otherwise be.

So, for me, I’d like 2 fairs a year in one city, Melbourne or Sydney. I don’t care which. And, in whichever city, the fair to be in one location, not many kms apart.

Suppliers need a more efficient route to selling to retailers. The current approach benefits the trade show companies and their suppliers of furniture, shell schemes, lighting etc, costing the suppliers, and, ultimately, retailers too much.

The meson gift fairs in Australia really does ultimately hurt local retailers. Talk to suppliers in New Zealand, The United States and the United Kingdom. They all love 2 shows a year in fixed locations.

16 likes
Newsagent suppliers

Hiring a retail manager

Click here to see this ad:

Retail Shop Manager

Tower Systems
Hawthorn, Melbourne VIC
Management – Store (Retail & Consumer Products)
Full time
$60,000 – $64,999 + Super + travel allowance

Retail Manager: Hawthorn, Victoria.

We are looking for an experienced retail manager, keen to manage their own small business retail shop. Someone with good current Aussie retail skills, ideally in innovative small business.

Yes, we are a POS software company. We also own some retail shops and are keen to find a leader to manage a shop, make it the best it can be and better inform us of local small business retail needs.

Product categories of interest are gifts, homewares, greeting cards and pop culture. We are keen to expand our reach.

We provide considerable freedom, which is backed with encouragement and support from our head office team.

The use of current POS software is key to success as are the growing online sales fulfilled through this business. Experience with Shopify would be a help.

The role includes, buying, hiring and training staff, rosters, shop floor displays, and days to day customer service. This is a lean business where the manager is a key day to day retail associate too.

This role reports direct to our head office retail businesses manager. There are opportunities in the future outside the shop, too.

This is a full time role.

Want to know more, please email mark@towersystems.com.au.

https://www.linkedin.com/in/mark-fletcher-tower/

https://www.youtube.com/@TowerSystemsPOS/videos

No agents.

Permanent residents or Aussie citizens only.

3 likes
Newsagency management

Is the magazine range we can see at Barnes & Noble in the US what we will see in Australia as newsagents give less space to magazines

People will travel for specialty magazines, as we can see in the US where the range of magazines I found in this Barnes & Noble is common in that group.

I have been thinking about this for a while and wondering what it would look like in Australia with a few newsagencies with a bigger range. And, by a few, I mean maybe only 2 or 3 in a capital city.

I don’t care so much about the weeklies or high volume monthlies – the supermarkets cover them. I am thinking about the titles outside of, say, the top 50 sellers, as outside of that there are many hundreds of titles people wold travel for. I see this today in the newsagency I have that offers the range. It does much better than the shops with a couple of hundred titles.

Anyway, here’s what I saw at Barnes & Noble, front of store, in the front window, attracting plenty of late night shoppers.

And, for those tempted to comment about margin and control: yes, we deserve much more than 25%, and we should have complete control over what we carry. In many situations, this second point wold increase sales.

11 likes
magazines
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