Talking about the future of newsagents
I have just recorded a podcast interview with a business advisory group in which the future of Australian newsagency businesses was a key topic.
It started off with dealing with some of the assumptions held by people, bankers, landlords, suppliers and shoppers, about newsagency businesses, that our day has past, our shops are out of date, that our businesses are dying and that the future is bleak. I appreciate the opportunity to put some evidence in front of those assumptions, to explain that not every newsagency is the same, that ma ny businesses in our channel are thriving.
It was interesting hearing the questions about the history of our channel and how that plays a role in decisions being made in newsagency businesses and some newsagency supplier businesses.
There is a broad understanding out there that Covid has been good for our channel and that as a result we have opportunities now mid 2021 that we may not have otherwise had. Indeed, the Covid pivot embraced by plenty in our channel was another key topic that we covered.
It was encouraging that they moved on from talking about old retail that is out of date and often with lights off. Plenty of time was spent on new categories and new opportunities newsagents are embracing.
My takeaway from the discussion is that there are plenty on the periphery of our channel, landlords, would-be suppliers and others who are interested in the evolution occurring in retail newsagency businesses. To me, this encourages confidence for the channel in that if others out there observing us are confident then we have even more reasons ourselves to be confident.
The best indicator, though, is the number of people keen to buy newsagencies. In my experience it is more today than for years now. It’s a good time for newsagents keen to sell in most locations.
This was my third such long-form discussion about the channel with professionals looking at the channel. The interest in what we are doing has increased. I see this fro newsagency business sales, landlord approaches, new supplier interest and some interesting major suppliers keen to engage in a fresh way. The next few years look to be very interesting for newsagents and those associated with them.
The stress of being audited by Ovato
Has your newsagency ever been audited by Ovato? If it has, you may recall a period of stress as you dealt with their information requests while feeling like you have done something wrong, feeling criminal.
The thing is, Ovato controls what newsagents are sent. They receive sales data daily. They receive returns data weekly.
If there is an issue, they would see it in the data.
Scanned based trading, newsagents paying for what they sell, would fix any data issue. Establishing scanned based trading with approved ‘locked’ software packages could provide a time saver for all involved in the compliance side of magazine sales in newsagencies.
Understanding the challenge of Covid variants
Given what is happening in Sydney at the moment and given the politically charged and too often inaccurate reporting by News Corp. and Nine Media outlets, take a moment to read this thread from Prof. Christina Pagel of the Clinical Operational Research Unit at University College London. This is a sober reflection from the UK on the challenge of Covid variants, something the NSW government is now becoming familiar with, despite insights from Victoria weeks ago.
I am sharing this as it reminds us retailers to be vigilant: wear masks even when not required by government, run clean businesses, ensure staff are clean and safe and to embrace QR code check in tech asap.
1. LONG THREAD (25+ tweets sorry) of my somewhat depairing musings on Covid.
Where we are, how we got here, why I’m sad about it.
— Prof. Christina Pagel (@chrischirp) June 21, 2021
Bluey cards a hit at the newsagency counter
We are grateful to have had Bluey cards in-store for a few days now. Customers are loving them.
The brand is instantly recognised. We can tell based on the comments in-store as well as the comments on social media.
The launch of Bluey cards is an excellent opportunity for an off-location pitch of cards. That is, pitching cards away from their usual location in the card department. Because of the Bluey brand, shoppers are more likely to purchase multiple cards at once we think.
Now, if you are wondering why the big deal about Bluey, here is some data this morning from a commercial online search data platform I pay to access. This speaks to the extraordinary popularity of the Bluey brand in Australia, and the world, right now.
Our decision to stock Bluey and engage with the brand online was based on this evidence. Once again, data is a key driver of business decisions.
36% year-on-year card revenue growth
A small high street suburban newsagency for which I have seen comprehensive live data has had a good Corona. 2020 was way up over 2019. Better still is the growth in 2021 over 2020.
Working with this business, the card offer has been re-cast in terms of range, placement and in-store engagement. The sales results speak for themselves.
This data is for January through March only. The data for the two and a half months since show even better results.
I think any newsagency business in any situation can easily achieve double-digit growth in card sales. The foundation to achieving this is in your business data, not supplier data, your data. It will show you what is possible, what to do.
For the newsagency mentioned above, there has been no capital expenditure on fixtures and a reduction in capital expenditure in inventory.
The biggest barrier I see in our newsagency channel to any business and the channel overall achieving more growth from cards is lack of active engagement with the category in-store.
Product manufacture and shipping hit several newsagency suppliers
New Covid outbreaks in China are impacting product production. Container shortages are impacting shipping. A shortage of capacity on ships is impacting shipping. Port capacity challenges are impacting shipping.
All in all, many suppliers sourcing from China are confronting significant delays. Unfortunately, not all suppliers impacted are being as transparent as they could be.
The Nine Media papers covered this in a story published online yesterday:
‘String of disasters’: China’s shipping delays set to widen trade chaos
The global shipping industry, already exhausted by pandemic shocks that are adding to inflation pressures and delivery delays, faces the biggest test of its stamina yet.When one of China’s busiest ports announced it wouldn’t accept new export containers in late-May because of a Covid-19 outbreak, it was supposed to be up and running again in a few days. But as the partial shutdown drags on, it’s further snarling trade routes and lifting record freight prices even higher.
Yantian Port now says it will be back to normal by the end of June, but just as it took several weeks for ship schedules and supply chains to recover from the vessel blocking the Suez Canal in March, it may take months for the cargo backlog in southern China to clear while the fallout ripples to ports worldwide.
The port problems are expected to continue for another 6 to 8 weeks, which could play into Christmas plans.
GNS most recently wrote about Chins sourced supply yesterday:
Increasing congestion across shipping ports in southern China is worsening due to a recent outbreak of COVID-19 cases. The Guangdong province, which is a key manufacturing and exporting hub in southern China, is experiencing its biggest backlog since at least 2019. As a result, we are facing ongoing challenges from our overall supplier base with stock availability due to Global manufacturing constraints, continued freighting challenges and pressures on raw material availability. We are seeing an increase in the length of supplier lead times of up to six months in some cases.
Rest assured, GNS is working closely with our suppliers to improve forecasts and stock availability. Our suppliers in some instances are airfreighting stock where they can to help ease the pressure, however we will still continue to have ongoing out of stocks impacting immediate stock availability.
If you require any updates please do not hesitate to contact your GNS Sales representative or your local GNS Customer Service team.
Good for them for being transparent.
GNS is not alone in experiencing an impact.
If you are a supplier and have been impacted or expect to be impacted, please let retailers know now.
Melbourne Gift Fair at risk?
Two suppliers today have suggested that the Melbourne Gift Fair scheduled for just over a month from now may not proceed. Both are scheduled to be they. One is certain it will not proceed while the other says it looks doubtful.
I mention it in case anyone have something more concrete.
UPDATE: 10 minutes after publishing this, I received an email:
Amazon opens a hair salon in the UK
Amazon continues to dominate evolution in retail. The company’s latest move, a hair salon in the UK, is attracting plenty of interest, which is what the company wants.
Click here for a report from the Evening Standard newspaper.
Click here for a Forbes article on the move by Amazon.
Click here for analysis from The Motley Fool.
Here’s a user experience video:
Here’s a more tech level preview:
It’s easy to ignore this move as not relevant to non hair related retail or to dismiss it as hype. I think the move is another relevant and sticky shift by the company that will lead to more changes in retail.
Hmm … the ATO benchmarks lag
I checked out the current ATO benchmark for newsagency businesses this morning and, as is usual, they are lagging behind reality.
From the description …
Businesses in this industry sell newspapers, magazines and similar publications, greeting cards, stationery and lottery products, and provide a delivery service for newspapers and magazines. They may also sell confectionery, drinks, phone cards, transport tickets, toys and gifts. Services provided may include photocopying, fax and other similar services.
to the data, the ATO needs to update this.
Newsagents: file your contracts
I was part of a discussion with several suppliers to newsagents this week and each complained about poor record keeping by newsagents.
This usually comes up because pop a breach of an agreement or a desire by a newsagent to switch suppliers. The contract gets raised and the newsagent says they don’t have a copy of it, often saying they were never given a copy of it.
Two of the suppliers mentioned that they keep records of when contracts are signed and when a copy was sent to their retailer customers.
I was helping one newsagent a few years ago with cards and they said they did not have a card contract. I checked with their then supplier, a card company I’d never dealt with. Sure enough, there was a contract and it had two years remaining.
All of this is easily resolved.
Any time you sign a contract or agreement, keep a copy, file it for easy access. Not doing this wastes time down the track.
This is pretty basic business stuff. It’s frustrating that among some suppliers the channel is known for poor record keeping.
Minimum wage increase
While media outlets have covered the story, business owners are best served going to the source. Click here to go to the Fair Work website page with all the details. For our channel, it includes this:
Most awards will increase from 1 July 2021. Wages in the Retail Award will increase from 1 September 2021 and the rates in 21 other awards where the FWC deemed there were exceptional circumstances will increase from 1 November 2021.
The best way to stay fully informed is by subscribing to their emails. Click here to do this.
Displaying remainder books with pride in the newsagency
Remainder books in newsagencies are often placed flat on a trestle table or in a dump bin. That is what we did for ages. Then, we tried treating them with pride, by displaying them in a way similar to what you may see in a bookshop.
This simple change boosted good sales to excellent sales.
Better still, customers commented, complimenting the display.
The photo shows part of the display. It’s located mid-store and is working better than the dump bins we had at the front of the store.
This particular store is not a bookshop, not even close. We are limited by the lease as to the percentage of floorspace we have give over to books. This display is us at capacity.
The change is display from something that looked cheap and somewhat apologetic to this display that is classy and proud lifts the shop and sees the return on investment from books growing beyond already good sales. It took a few minutes to create. The initiate was by a new team member who thought they could do better … and they did, for which I am grateful.
Is News Corp considering print changes in Queensland?
The frustration with late newspapers is being expressed by customers and newsagents in Queensland. So frustrated are some newsagents that they are actively discussing quitting the category as the grief of late papers is not worth it.
Newsagents getting newspapers from News Corp. after 10am each day makes for a tough day in the shop, understandably.
I’ve been told that News Corp. execs have were meeting last week to discuss making further changes to fix the late newspaper problem.
ICYMI: WH Smith has 120 stores in Australia
UK newsagent retail group WH Smith now has 120 stores in Australia, across 8 consumer-facing shingles.
In 2011, WH Smith was early in their Australian journey. In 10 years they have come a long way. Their Australian retail group is diverse, and I think that is a strength.
The number of corporate stores in the group is an important strength, as central decisions applied to a group of stores is efficient for their focus on travel convenience.
I like the clarity of their published goal:
OUR GOAL IS TO BE THE LEADING RETAILER IN CONVENIENCE, BOOKS AND NEWS FOR THE WORLD’S TRAVELLING CUSTOMER.
Convenience is a competitive space, especially convenience in the travel setting. Locally owned indie businesses struggle in terms of buying power, marketing spend and in-store consistency.
Kudos to the folks at WH Smith for what they have done in Australia over the last 10 years. I did not expect them to be where they are today.
What a brilliant ad promoting vaccination and its connection with opening up
the french vaccination ad campaign is just *so good* pic.twitter.com/ciObPlRwW8
— juan (@juanbuis) June 10, 2021
Clever visual merchandising engages shoppers
This display is working a treat in the newsagency. Terrific comments and, better still, sales.
When it comes to VM, every day for us it is about playing against expectations and assumptions, trying, through product range, placement and display to pitch a narrative that is fresh and relevant to now rather than a reinforcement of a past.
News UK writes the value of The Sun newspaper down to zero
News Group Newspapers, a subsidiary of News UK, has written down the book value of The Sun newspaper to zero, reports The Guardian:
Rupert Murdoch has written down the value of the Sun newspapers to zero as the impact of the Covid-19 pandemic helped to fuel a £200m loss at his flagship tabloid titles.
Advertising and sales revenues at the Sun and the Sun on Sunday plummeted, with turnover falling by 23% from £419.9m to £324m in the year to the end of June 2020.
The torrid market conditions, coupled with one-off charges related to ongoing legal action over allegations of historical phone hacking, led to pretax losses more than tripling from £67.8m in 2019 to £201.4m.
As a result News Group Newspapers, the subsidiary of News UK that operates the two titles, wrote down their value to zero. The £84m non-cash “impairment of publishing rights” essentially means the publisher does not believe the titles will return to positive growth.
Another factor is the value of the daily print newspaper as an advertising platform. As more ad dollars flow online and elsewhere, the economic value of the print product fades.
Tyro proactive in support for retailers impacted by terminal outage in January
Tyro continues a pattern of clear and timely communication with its retail partners about the terminal outage in January and, in particular, the support package it offered affected businesses. They have a structured process, which has been pitched to retailers by email:
Further to our earlier emails in February, we wanted to remind you that the registration page for impacted customers of Tyro’s January terminal connectivity issue is still open.
If you have suffered a financial loss and would like to be contacted by us regarding your particular circumstances, please complete the registration process outlined below. Upon completion of this process, we’ll review your particular circumstances and then provide you with options for either proceeding with a simple claim or through case management.
Important: Please complete the registration process even if you previously raised your concerns with us in writing or on the phone.
1. Click here before 31 August 2021 to go to the registration page; and2. Check the tick box and click the submit button on the registration page before 31 August 2021.
Please note that you will be registering the Merchant ID(s) that Tyro has recorded as having been impacted. This email address is associated with a business owner (or equivalent) user role for those Merchant ID(s).
We will do all we can to expedite our response to you, however this could take up to six weeks following your registration.
For any assistance or questions, please contact our 24/7 Australian-based Customer Support team on 1300 966 639 (select option 0) or cs@tyro.com.
Regards,
The Tyro Team
Where are the people looking for work?
I know of several retail businesses looking for employees right now, and struggling to attract applicants.
Above award rates have not attracted people, nor has reasonable roster flexibility for the casual roles.
Is it that retail has lost some appeal? Has Covid made people wary of casual work?
Where has the usual pool of uni students who would take these roles gone?
I’m not suggesting people who could apply are bludging or that government benefits for the unemployed are too high. I don’t support those tiresome and unsubstantiated views.
It does feel like something has changed. A year or two ago, a retail manager ad offering $60,000 a year would attract 30 applicants in a couple of days. Now, you are lucky to get one applicant. Like I said, it feels like something has changed.
Maybe there are less international students and the roles they would take for 20 hours a week are being taken by people who might otherwise apply for retail casual roles.
In terms of full time, maybe people who may have moved jobs 2 years ago now stay because they don’t want to be in a new role while Covid is in the community.
Regardless of the reason, it is challenging at the moment to full vacancies.
The mid-store VM pitch in the newsagency
While there is no doubt that the front of any shop is key, the middle of the shop is equally important, but often neglected.
It’s in the middle of the shop where you get to speak to shoppers, people looking for something, people wanting to be sold to. People who spend Tim in the middle of the shop are less likely to be convenience shoppers or destination shoppers – depending on what is located where in your business.
We use the middle of the shop to tell stories of categories and ranges of which we are proud. Take our latest baby / young kid pitch.
This beautiful display, not done by me, is a stunning representation for the category. It is placed with cards for the same occasions nearby. It is also placed so as to not hit magazines from being seen from outside the business.
It’s a display unlike what a newsagency in Australia is known for, like many of our shop floor displays.
Shopper reaction has been wonderful through words and purchases, both are important, of course.
This mid-shop space has the same lease cost. make it work.
Key to success is that you do not have purpose made shop fixtures. Simple fixtures you can mode and adjust are key here. This allows you to crate for the requirements you have right now.
My message today is – look at that mid-shop space you have, think about how you can use it to benefit the narrative of your business. Don’t let it be wasted space, space in which you are not invested.
Retail newsagency management today is about innovation, with a budget, chasing a commercial outcome, in supporting of the narrative you want for your shop.
Growing gift packaging revenue in newsagencies
Gift packaging – bags, wrap, tissue, accessories – is often a neglected category in a retail newsagency business.
Outside of our newsagency channel, a card and gift retailer can see 20% of their total card / gift packaging revenue come from gift packaging. In our channel, the number is usually somewhere between 5% and 10%.
Gift packaging has been a focus in one of my shops over the last six months. It was accounting for 3.7% of revenue within cards/gift packaging. Looking at our most recent data this morning, it is contributing 6.2% of total gift packaging revenue. This growth is even better considering the overall card/gift packaging revenue growth of 36% being achieved.
Thinking of gift packaging more broadly, here are gift packaging revenue contribution percentages by segment a key supplier in this space shared with me as a benchmark:
- Bags: 37%.
- Rolls: 30%.
- Tissue: 11%.
- Folded wrap: 11%.
- Accessories: 7%.
- Wrap flat (sheets): 4%.
I share this because one way we are growing our packaging revenue is by looking at sales for each segment carefully.
The tissue segment contributing 11% of overall gift packaging revenue has surprised some I have discussed these percentages with. They felt it was too high. Considering the innovation in the tissue space and seeing this product in my own shops, I see the 11% as a useful benchmark, and one I want to pass.
While, for sure, growth in gift packaging revenue relies on having access to products your customers want. Your engagement is key, it is the starting point for change. Your engagement will drive supplier engagement. As I am seeing in so many cases now, excellent growth is there for the taking.
Check out your year on year gift packaging results. Compare your segment revenue contribution to the benchmarks shared here. You may discover an opportunity to manage for success.
Data is the key here, good data. Good data is key to good business decisions. Your data is far more useful and relevant than supplier sell-in data. While there is a place for supplier data and insights, when it comes to your shop and decisions on range, captions and placement, your data will matter the most.
My advice to all newsagents is – take ownership of the card / gift packaging area of the business. It will reward your attention with revenue growth, good margin revenue growth.
Free newsagent workshop today @ 10:30am
I and some of the newsXpress team are hosting a workshop today about cards, sharing insights from the newsXpress developed intellectual property that its the basis for card sales growth of between 25% and 75%.
At this free workshop, I will show you actual results, which you will be able to verify. One of our newsXpress team members will step you through the work involved to achieve the results. Often, we are achieving excellent results with no capital spend.
We will show you the most comprehensive card performance reporting you will see for any card retailer in the world. I understand that is a bold claim. Once you see what we will show, we think you will agree.
Today, June 8 @ 10:30am if you want to grow your card sales. Here is the link:
https://zoom.us/j/98961647990?pwd=cy9wdnllL1JqYlFyUDdkR1FISlFrUT09
Meeting ID: 989 6164 7990 Passcode: 519968
In the meantime, if you have questions, please email help@newsxpress.com.au.
Yes, I am a Director of newsXpress
Thinking of you week to support greeting card engagement
Some of our major card companies are supporting Thinking of you week, which runs from June 20 through 27.
The goal of the week is to encourage shopper engagement with cards.
This is an easy promotion to engage with through, without having too purchase additional stock:
- Placement of cards you love at the counter.
- Creating a Staff Picks selection of cards for customers to see.
- Placement of cards in an additional location near the store entrance.
- Making cards the focus on social media leading up to and including the week.
- Sending more cards yourself.
- Hosting an in-store event around cards.
Cards are the best margin physical product in-store. Shining a light on the category makes good business sense.