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

Author: Mark Fletcher

Pitching The Saturday Paper and why someone doesn’t shop our channel

If you are on Twitter and stock The Saturday Paper, this thread is worth commenting on. Newsagents responding to threads like this can help guide people as to where to purchase. The thread I link to below bones on quite a bit with people saying where they access the title.

Further in this Twitter thread is this:

I responded:

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newsagency marketing

Kudos AFL record

The AFL record is the one magazine that consistently pitches newsagents on social media posts as a retailer where you can purchase the title. Every issue.

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magazines

Excellent toy growth in 2020 … opportunities in 2021 for newsagents

I am grateful to have been provided a copy of a comprehensive report (from March 31, 2021) into global and Australian toy sales in 2020 comparing to 2019. The data assessed in the repot is pulled from a large pool of toy and toy related retailers in Australia and globally. The assessment itself is undertaken by the NPD Group, a research and analysis company.

The results are extraordinary. While I won’t share the report here, I can share this high level page that speaks to the terrific growth in toy revenue in Australia compared to the rest of the world in 2020 over 2019.

Deeper in the report is a list of top performing brands, some of which plenty of newsagents stock. This information and other information nearby is what we can leverage to further grow the toy category in our businesses.

Of particular interest are the Christmas results and the move, in 2020, to toys and games of >$50 in value. This is the fastest growing sub-category for the Christmas season. It interests me because too many newsagents focus on low price point toys while shoppers are happy to spend up on higher price point toys.

Looking at the results more broadly …

  1. Global Trends 
    1. 8/13 Countries grew sales revenue.
    2. Australia achieved strongest growth: 22% as shown above.
    3. Q4 growth was excellent.
  2. Australian Market 
    1. +22% Growth.
    2. 12out of 13 super categories grew revenue.
    3. Unlicensed Toys Grew +21% .
    4. Licensed Toys Grew +26%.
    5. 10 months of consecutive growth (adding $256m to Toy Industry).
    6. Consumers move to bigger box items > $50 items
  3. Christmas performance 
    1. +16 grow revenue/
    2. Unlicensed Toys grew 19%.
    3. Licensed Toys grew 11%.
    4. 12 out of 13 super categories grew.
      – 5 categories grew faster than the total category.
  4. Looking ahead into 2021 and considering early indications.
    1. Toys / games remain strong.
    2. Online in toys and games is growing faster.
    3. Movie licences are back.
    4. Puzzles and Games need to be watched / managed / promoted.
    5. Collectibles are showing a strong start to the year.
    6. Shoppers are looking for newness.

The toys / games / puzzle and related categories are good for newsagency businesses. They can make a terrific contribution. I know of newsagents doing more than $150,000 a year in these categories and achieving a 50% or more gross profit – making the GP value of the categories considerably greater than the contribution from newspapers and magazines combined.

Am I saying newsagencies should become toy shops? No, not at all. But … considering the cards we sell, doing well with toys / games / puzzles makes sense in our businesses.

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Newsagency opportunities

Free taking your retail business online workshop

This Thursday @ 10:30am Melbourne time I am hosting a free Taking your retail business online workshop. Here is the link for accessing this interactive session:

https://zoom.us/j/93218516369?pwd=QW4wR0lFT1F1ZWtzQmFHK2ZxamY3dz09 Meeting ID: 932 1851 6369 Passcode: 636934 Booking is not required.

I’ll cover every question and topic people attending want including: where the shoppers are, what they are looking for, how to get online, how to attract traffic, handing shipping, back office efficiency, niche retailing and how to treat your online business as a start up.

Too often I see people think having a website created for your business is all you need to do to tap into online riches. In this session we will explore the real work, the on-going work that is critical to success online. We will break it down from a local small business retailer perspective.

This is not a sales workshop. It is designed to provide you with information that you can use regardless of who develops your website and regardless of where you are at in your online story.

Everyone is welcome to participate.

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newsagency of the future

The growing empty office space question – for high street retailers

Discussions about empty office space and empty CBDs are growing, which is good. In the US, the conversation is more advanced than here in Australia, with Twitter, parts of Microsoft, Pinterest and plenty of other companies permanently adopting the work from home model or, at least, a far more decentralised model, it’s no wonder property developers are listening and engaging.

Here in Australia we are seeing insurance companies, banks and other usually centralised businesses adopting work from home more.

Scott Galloway has written about this recently. His piece, We (might) Work is well worth reading if the topic of the future location of office work interests you. It includes this…

The wholesale abandonment of office space has been among the most striking fallouts of the pandemic, and it will have profound effects on the way we live and work, long after the virus has been tamed. In New York, new office space is coming on the market 59 percent leased, down from 74 percent pre-Covid. San Francisco went from its lowest-ever office vacancy rate to its highest in the same year, and office rents are set to decline by 15 percent. The worst may be yet to come. Analysts predict that commercial vacancy rates will rise from 17.1 percent in 2020 to 19.4 percent in 2021, besting the previous high of 17.6 percent in 2010. And, as $430 billion in commercial and multifamily real estate debt matures in 2021, lenders will be forced to reconcile the effect of the pandemic on their investments.

Why does this matter to newsagents? How, where and when people work plays a role in the performance of high street retail and with the bulk of our channel on the high street, a decentralised workforce matters to us. It can play into what we stock and the services we offer.

There are plenty in our channel who see the work from home moves in 2020 as an aberration, they expect things to get back to normal. I am in the camp of what is normal anyway … every day, / week / months is a progression from the last, there will be no getting back to normal. Online, more people working regionally, less office centric CBDs … these are all connected issues, issues that the pandemic has sped up, issues that impact retail, issues from which we can benefit.

I keep reading up on this topic of office space use overseas as I think it helps to inform decisions we can make today, for our future.

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newsagency of the future

Nine Media fails newsagents on Easter supplies

The hack of Nine Media meant the company had to request quantity orders from newsagents via email. For some, though, that was a waste of time. They were not supplied what they ordered, not even close, and sold out by early morning. A missed opportunity for this newspaper company that is challenges on several fronts.

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Newspapers

The Easter counter in the newsagency

This Easter counter pitch has been working a treat for us, driving excellent, high value and high margin, impulse purchases. Here is a photo from a few days ago, when we had more stock.

There is nothing newsagency traditional about this product offer at the counter of our high street suburban Melbourne business.

Now, looking at the display in detail, it is the sample of the Easter chocolate that has contributed the most to sales. The chocolate is delicious, creamy and local – three key factors in driving sales for us.

From a time management perspective, taking the display down and replacing it after today is easy.

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newsagency marketing

Employment opportunity: retail manager

I am looking to hire a manager for a retail business. The ideal person will be focussed on a career in retail, innovative retail. They will be self motivated, not bound by channel borders and have a keen awareness of the role of tech in the future of retail.

It is a Melbourne based position. Hands on. I don’t want to share too much detail as it is more about what they might bring to the business rather than what the business might bring to them.

If you know someone who may be interested, please have them email me at mark@newsxpress.com.au.

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Newsagency management

A local British community buys a newsagency to create a community hub

An interesting story at the Shropshire Star on a community buying a ,coal newsagency to convert it into a hub:

Former newsagents brought back to life as community hub
By Charlotte BentleyBishop’s CastlePublished: Mar 20, 2021Last Updated: Mar 21, 2021

A south Shropshire community has announced plans to transform a former newsagents in the town into a hub and bring it back to life.

The Bishop’s Castle and District Community Land Trust has bought 70 Church Street, a former newsagents, for community ownership.

Hope Robson, resident and activist, said she can’t wait to get started on the project bringing the old Stars Newsagents back to life in the centre of Bishop’s Castle.

Thursday marked the launch of the campaign, and the day the front door was unlocked for the first time since August 2015.

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Uncategorized

The Age editor on the hack that hit Nine Media

Here is the text of a note from Gay Acorn, Editor of The Age, to subscribers, in which she discusses the impact and their response.

Dear subscriber,

 

Age staff spent most of last year working from home. Here we go again, not due to a global pandemic this time, but a cyber attack.

The attack hit Nine’s systems early on Sunday morning, disrupting live television as workers arrived and found their computers unresponsive. The Age was also affected, especially our print newspapers, as networks were locked down to protect our systems and data.

The flow-on effects could be seen in our newspapers in recent days – for example, graphics and new photographs could not be used and we reduced the number of pages.

Deputy editor, Michael Bachelard, who was editing on Sunday, says it was a mad scramble to put on Monday’s newspaper. It was a bit like going back to the 1950s, using a digitised version of the same print techniques from that period – a lot of cutting and pasting! Monday night was also challenging but we are now confident we can produce unimpaired newspapers in the coming days and weeks.

I am so proud of our production staff – led by production editor Wade Pearce and Monday to Friday print editor Selma Milovanovic who ensured the newspaper was published in the most difficult of circumstances.

Thankfully, our website and apps mostly remain unaffected and any login issues you may have experienced have now been resolved. We are all working from home now so we can use our own internet network.

Who organised this attack is not yet clear, but it is a wake-up call for businesses and governments that this kind of disruption is likely to become more common. This was a sophisticated attack, which seriously affected one of Australia’s biggest media organisations.

I want to apologise to you for the compromises we have had to make to the quality of the newspaper to ensure its publication and delivery, and for your experience on our website and app during this time. We are doing everything possible to get the issues fixed quickly and we will keep you up to date about any developments. For more information, please see our FAQs below.

Gay Alcorn
Editor, The Age

For anyone in business, what happened to Nine Media is a reminder about the need for good disaster planning.

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Newsagency management

The first newsagency sales benchmark study for 2021 launched

This morning, I kicked off the call for data for the first newsagency sales benchmark study for 2021. I have decided to compare 2021 with 2019, for the reasons I outline below. In samples I have taken already this year, the 2019 comparison provides a more useful analysis for business planning. Here are the details as emailed to newsagents just now:

Q1 2021 NEWSAGENCY SALES BENCHMARK STUDY.
I am collating data for a new benchmark study, looking at sales covering January through March 2021 versus January through March 2019.

Why compare to 2019? Because … 2020 was an odd year. To really understand where your business is at today, we need to compare to two years ago, a more stable trading period.

How to participate.

  1. Please run a Monthly Sales Comparison Report for 01/01/2021 – 31/03/2021 compared to 01/01/2019 – 31/03/2019.
  2. Tick the category box. IMPORTANT.
  3. Tick to exclude home delivery and sub agent data.
  4. DO NOT tick the supplier box.
  5. Preview the report on the screen. Save as a PDF.
  6. Email these reports direct to me at mark@towersystems.com.au.
  7. Read the report yourself and see what it shows you about your business.

I will email the results to all participating newsagents and publish the results on theAustralian Newsagency Blog as a service for all newsagents.

I own and run three newsagencies. Over the years I have had three others. I own newsXpress, the newsagency marketing group.

Here is a video of some of what is offered through the Tower newsagency software:

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Newsagency benchmark

In attacking Samantha Maiden, The Australian Financial Review plays politics, not news, again

The hatchet job by Aaron Patrick on Samantha Maiden published in The Australian Financial Review today is yet another example of Nine Media outlets ditching news for political engagement / interference, and another reminder that paying to access biased trash is a waste of money. In this week of the Nine hack, surely they had better priorities.

That the Patrick ‘story’ got through the editorial process and published speaks to how weak Nine Media has become. That the story remains publicly available, and not behind their paywall, speaks to the objective of the piece.

In my opinion, this ‘story’ by Patrick is another shitty interfering and biased article in a shitty publication that cares little for evidence based reporting.

It’s an embarrassment to have The Australian Financial Review on the shelf – because of the lobbying in which it engages daily and it’s tiny size for such a high price. I guess the only redeeming feature is that it’s not a News Corp. title.

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Ethics

The Queensland retailers with an advantage

Over the last few days, Queensland retailers with an established and good online presence and back end fulfilment process have been able to offer a timely pitch to existing and prospective customers. Whether for safe click and collect or delivery, having an easily shopped online presence is the key first step to trading which your shop is shut or while people are less likely to leave home or work and shop with you if you are open.

I know of newsagents who last year started on the path too getting online and as the Covid situation eased they pulled back on their plans. The thing is, online is growing, retreating because Covid became more under control was a poor decision.

Queensland retailers who are established online are seeing the benefits of that investment.

If you do not have an online presence through which people can trade with you business, make this a priority. But beware, there are plenty of shonky web development businesses and people out there. Choose wisely.

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newsagency of the future

Why are newsagents the only outlet for the House of Wellness magazine?

News Corp. is promising the next issue of the House of Wellness, the crappy (my opinion) ad platform from Chemist Warehouse. News Corp. is clear that it is only available from newsagents in their FAQs:

FAQ’s

Q. How can I get a magazine?

A. Purchase The Courier-Mail on Saturday April 3 or The Sunday Mail on April 4 and present the original token from the newspaper at participating newsagents to redeem.

Q. Can I get the magazine from supermarkets or petrol stations?

A. No, the magazine is only available from participating newsagents in QLD.

Q. Can I get more than one magazine?

A. No, one magazine per purchase of the paper. If you would like a second copy, you must purchase a second copy of the paper.

Q. Do I need to pay for the magazine?

A. The magazine is free with purchase of The Courier-Mail on Saturday April 3 or The Sunday Mail on April 4, while stocks last and only at participating newsagents.

Q. Is my newsagent participating?

A. Click here to see a list of participating newsagents.

Q. The magazine isn’t inserted into my paper, what do I do?

A. The magazine is not inserted in the paper. You will need to visit a participating newsagent, present the original token from within the paper purchased on April 3 or 4, then you will receive your magazine.

So, why is the House of Wellness only available from newsagents? I suspect because supermarkets, convenience outlets and petrol stations have not agreed the paltry terms for handling this advertising product, because newsagents are the only ones prepared to accept less than minimum wage for handling this title, for putting top with people who buy their paper elsewhere and come to the newsagent for the free title, people who will be angry they had to wait in line to get their free title.

House of Wellness is not worth the time or space it will take up. There is no upside for newsagents in my view. Every time we agree to sell ourselves short, it reinforces that we are agents, not retailers.
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Newspapers

Nike leads on migrating sales from retail to direct to consumer

Nike, like many online present international brands had a good Covid. It was so good, in fact, that they have made some decisions as to future sales channels, a reported recently by CNN:

Nikes are getting harder to find at stores. Here’s why

New York (CNN Business)Struggling to find Nike sneakers at your neighborhood shoe store? That’s by design.

Nike wants customers to buy more of its shoes, clothing and gear at Nike stores and on Nike.com and its apps, as well as at a more limited group of retailers like Dick’s Sporting Goods (DKS) and Foot Locker (FL). So the company in recent years has slashed the number of traditional retailers it sells its goods to while shifting to grow directly through its own channels, especially online. That has affected big and small retailers. In addition to pulling out of some independently owned stores, Nike (NKE) also ended a partnership selling on Amazon (AMZN) in 2019. Nike has not disclosed which retailers specifically it has cut ties with.

The company’s move away from a primarily wholesale distribution model is a departure from the early decades of Nike. Small, independent sneaker retailers were key to growing Nike’s popularity in the company’s early days, when people found out about upcoming shoe releases from visiting the local shop. But Nike has said it can make more than double the profit selling goods through its own website and physical stores than it can through wholesale partners.

Nike gets to control the shopper experience more tightly and the prices at which products are sold when it goes directly to consumers. That’s a big deal for Nike, a premium brand that wants to ensure merchandise is showcased to customers in enticing ways and prevent products from being discounted too heavily.

Is this a trend in our channel? Not yet as far as I can tell. Sure, there are some supplier who sell direct, but not many and not a high volume. Often, their execution is less than ideal.

Is this a trend we are likely to see in our channel? I think so. We should plan for it, expect it. If I was a supplier it is what I would do. The less steps between a manufacturer and the consumer of what they manufacture the better for the manufacturer.

What should we small business retailers do? Be aware. Source locally. Favour suppliers that are clear in stating they will not go direct.

I think it will be another year or two before we understand the extent of disruption to high street retail wrought by Covid. The Nike story is but one example. My advice is don’t blame Nike. They are doing what they need to do for their business, for their shareholders. That is their obligation. It is the obligation of major suppliers, too. hence my suggestion to be aware.

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Newsagency challenges

My newsagency software company is hiring

At my newsagency software company, Tower Systems, we are keen to hire someone who knows and has used our Retailer POS software for a new role on our help desk. This is a technical role. It would suit someone looking to work in a software company, someone keen to learn and keen to help others learn POS software technology.

The help desk is busy and the support call variety diverse. Retail experience is beneficial. Good knowledge of our Retailer POS software would also be helpful as a base on which we can train more on the intricacies of the software.

We need someone who can manage themselves in that almost all of our help desk team members now work from home. Location is not all that important given this.

If you know of someone who could be right for the role, please encourage them to reach out to me at: mark@towersystems.com.au

We will be advertising publicly in the next few days. If an ideal candidate from within our community applies before we do this, we may not advertise.

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newsagent software

Queensland newsagents face challenges with new Covid restrictions

The 3-day greater Brisbane lockdown to commence from 5pm today as announced by the Queensland Premier this morning presents challenges for newsagents, who can remain open as they are essential. The challenges relate primarily to jealousy from retailers who have to close and those in the community who support them.

We have seen some similar challenges elsewhere in Australia in previous months.

The other challenge is the requirement by the state government that masks be worn throughout Queensland. Some mixed reporting in the media today has some in the community thinking masks are not mandatory. Listing to the Premier’s press conference this morning, masks are mandatory statewide.

To deal with masks being mandatory, I suggest newsagents leverage social media to ensure clear messaging. I suggest they also ensure consistent messaging in-store – to head off any fruition that may be seen among shoppers. Early Monday, newsXpress released collateral, including …

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Newsagency challenges

News Corp. to reduce newspaper distribution in regional Queensland

The ABC has just published this story about a decision by News Corp. to scale back print newspaper distribution in regional Queensland:

News Corp Australia to stop distributing newspapers to much of regional Queensland

News Corp Australia has notified a number of newsagents across regional Queensland that it will stop delivering its titles to them from late September, due to the “very high cost” of distribution.

News Corp wrote to select newsagents last Thursday, informing them it would no longer provide physical copies of eight mastheads, including The Courier-Mail, The Australian and The Daily Telegraph, after September 26.

The ABC understands distribution will cease to towns further west than Charters Towers in the north, Emerald in central Queensland and in some parts of the state’s south-west.

The move leaves a large swathe of Queenslanders without access to a daily newspaper covering state, national and international affairs.

In the letter seen by the ABC, News Corp Australia said its decision was based on “the very high cost to distribute to your region, in the context of how people access their news today, [which] makes its continuation unsustainable”.

News Corp. issued this statement to the ABC:

We are following our audience — and our advertisers — to where they consume news and information, allowing our news coverage to be more immediate and focused on our communities. While our changes in western Queensland represent about 1 per cent of state newspaper sales, the true value of a newspaper is in the news, not the paper it’s printed on.

Read the whole ABC story: as it goes into detail and quotes several newsagents.

Here’s the thing … print in not an efficient medium for the distribution of news and opinion. Sales of newspapers have been underline for close to 20 years. The moves being made by News Corp. in Queensland will not be the only such moves.

As I have written here over the years, the only issue to be resolved about the retreat and ultimate closure of print newspapers is the timing.

Newsagents need to run their businesses so as to not rely on newspapers or any legacy products. Hopefully, the story this morning from the ABC encourages more newsagents to pivot.

Now, as to News Corp. itself, it has not dealt with and is not dealing with these decisions in an inclusive way. It is being selfish and secretive. but, hey, that’s News Corp for you. I say selfish and secretive because company representatives tell newsagents they are important, that they support them, that they need them. Unfortunately, too many newsagents and some who support newsagents drink and that kool-aid and fall into line with the News Corp. spin.

News Corp. should be transparent with newsagents about its timeline. Yes, I am sure it has a timeline that documents the trigger points for withdrawing distributions like that covered in the ABC story this morning and even bigger moves like when it will close capital city dailies. I get why it is not transparent …/ but I wish it was as, sadly, there are newsagents who believe News Corp. more than they believe their own sales data.

I support newspapers in newsagencies, but only on terms that are viable for newsagents. By that I mean being frugal in space and labour allocation while at the same time aggressively attracting new shoppers for new product categories that offer growth opportunities into the future.

Anyone involved in print newspaper production, distribution and sale is involved in an activity that will end … soon. Everything being done needs to be done on the basis of pursuing a soft landing. That is what News Corp. is doing with these decisions. If I was a News Corp. shareholder;der I’d be supporting their moves.

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Media disruption

A warning to newsagents considering deleting business data prior to settlement when selling the business

It concerns me when I hear of a newsagent wanting to delete data from their computer system prior to settlement, prior to a new owner taking over the business.

In one instance recently, everything was deleted except for bare bones stock information. All sales history, supplier details and more was obliterated, everything a new owner would need to make good business decisions.

It’s a key point I make to prospective new owners. I suggest they have it written into the purchase contract that business data is not to be deleted without their written permission, and that as part of due diligence, yes that is a thing in buying any business, they scrutinise the data available and ensure it is what they expect and need.

I can’t think of any reason to delete data from the POS software prior to the sale of a business. I appreciate that for some in our channel this is not a popular view. However, I am looking it in terms of the future and not in terms of protecting a newsagent who is selling.

Imagine taking over a business on an agreed set of performance numbers, being in there a few months and needing to compare how you are going and realising that the data you need for the comparison has been deleted. If this happened to me I’d wonder why, I’d wonder what the deletion of data was hiding. This is why I recommend that requirements as to data are covered in any purchase agreement.

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Ethics

Victorian newsagent awarded $399,405.68 by VCAT in matter against landlord

Orders issued Wednesday by VCAT in a matter between the proprietors of Elsternwick Newsagency and their landlord were in favour of the owners of the newsagency:

Having regard to the findings set out above the Tribunal finds in favour of the Applicant and will order the Respondent to pay compensation in the sum of $399,405.68.

It is worth reading the full details published on the matter as they speak to the value of good record keeping and clear and concise communication.

While the orders could be overturned on appeal, the VCAT orders are a key next step in resolution of a complex and expensive matter.

I know of newsagents in dispute with their landlord but are unwilling to commence any proceedings. I think some landlords prey on this reluctance for a legal fight. Forums such as VCAT make it easier for small business retailers to commence action and have a matter considered and resolved for a lower cost in legal fees. Of course, they will rack up if the matter is appealed.

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Newsagency management

US landlords claiming online sales as in-store revenue for rent calculation

The Wall Street Journal is reporting that some US landlords are demanding retailers report online sales as part of store revenue.

Retailers and Landlords Clash Over What Counts as a Sale
Rents based on percentage of sales leave room for interpretation as line between online and store sales blurs

Stores are reopening and customers are streaming back in, which means retailers that withheld rent during Covid-19 shutdowns are now able to pay. But first they have to agree with their landlords on how to define a sale.

Landlords are increasingly offering deals in which retailers pay a percentage of their monthly sales in rent, rather than a fixed amount. Percentage-rent leases give retailers breathing room when sales decline and allow landlords to reap the upside when sales recover.

But there is a sticking point. With e-commerce soaring, some landlords want to include a portion of online sales in the new leases, arguing that physical stores play an important role in many of these transactions. Retailers are pushing back, according to landlords, real-estate brokers and retail executives.

If this does happen it will only lead to more retailers exit9ing shopping malls. Malls are struggling as it is to attract retailers because shoppers are remaining sticky with high street retail they engaged with during lockdowns.

But, hey, we know what major shopping centre landlords are like. Yeah … awful. Look at Westfield, long into a lease they decide to charge a fee to access the post box located in a non public area of the centre that you have had free access to for years. And they wonder why retailers are exiting.

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Ethics
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