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

Author: Mark Fletcher

The one tip that helps customers choose a Mother’s Day card

I customer was wondering whether the card in their hand was right or whether they should shop elsewhere. “Have you checked the back of the card”, I said. They turned the card over and saw that the purchase supported the McGrath Foundation and that the card was Australian made. They bought the card.

Australia made matters with plenty of shoppers, as does a good charity connection.

If your Mother’s Day cards are Australian made and they pitch a good charity connection, ensure everyone working in the newsagency knows to gently suggest customers look at the back of cards they are considering.

Supermarkets are too disengaged with shoppers to do this. The same with department stores and discount variety shops. Newsagent can own this turn the card over engagement. Well, at least those of us with cards made in Australia.

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marketing tip

Pitching newsXpress

Yes, this is a marketing pitch from me about newsXpress, the newsagency marketing group I own.

newsXpress is unique, engaged, optimistic and helpful. The newsXpress community is made up of wonderful retailers who support each other and who appreciate the support from a crew of head office specialists in business data, retail business management, local engagement and more.

I am sharing this video to show rather than tell.

Our theme for 2024 is MAKING THINGS HAPPEN.

It’s about action, growth, success and enjoyment for newsXpress members.

We see opportunity for attracting new shoppers, helping existing shoppers spending more and increasing the overall GP% of newsXpress member businesses.

This is what MAKING THINGS HAPPEN is about.

In December 2023, participating newsXpress members each made, on average, $3,500 gross profit from a product opportunity we accessed without any downside risk. Plenty made twice this.

In 2023 we helped a member deal with challenging cashflow, another with employee theft, another with an exit strategy and another with a complex competitor situation.

We also helped a retailer cut their rent by a third.

Nothing we pitch is mandatory.

Online is the biggest opportunity of 2024 without a doubt. The latest benchmark for Aussie retail reports online as 10% of total business revenue.

In the Aussie newsagency channel, the average figure for those with a website is under 5%.

If you don’t have a website, what would a 5% bump in revenue feel like?

We have businesses we have helped achieve a 20% bump in revenue in a year from online.

We leverage our Tower Systems experience and our newsXpress experience exclusively to help you be open 24/7, serve new shoppers and add valuable net profit in using existing overheads. Our skillset is unique, our experience backed by plenty of success.

newsXpress exclusive. We offer access to a half price, fixed price, beautiful Shopify website connected to your Tower POS software. We back this with advice and mentorship to help you find a profitable niche you like.

If you can’t increase local physical shopper traffic, online is a smart move to improve business reach and profitability.

One newsXpress member launched a website with us last year and added $50,000 in good margin revenue in six months.

Another newsXpress member used their website to pitch an entirely new product category and found a profitable second business as a result, using existing labour and facilities in the shop.

We showed another newsXpress member how to expand the reach of their website and within two months they achieved thousands in additional good margin revenue.

We’d love to connect you with some of these retailers so you can hear for yourself what is achievable.

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newsagency marketing

Why is Nine media paying WA newsagents a lower percentage to sell The Australian Financial Review? And, at what point is the paltry margin NOT worth it?

Retail newsagents in Western Australia make 7.8% gross profit from selling the weekend edition of The Australian Financial Review while east coast retail newsagents make 10.6% for the same product. Here is the evidence. First up, the WA notice:

Now, the east coast notice:

Both of these notes come from Paul Munro, Director, Circulation Sales & Operations Nine Publishing, who is based in Sydney.

They value Western Australian retail newsagents less than their east coast counterparts, yet labour and occupancy costs in WA are the same as elsewhere.

Then there is the broader question of whether stocking the AFR is worth it to any retail newsagent. By the time you unpack the product, count what you have received, place it in-store and do other requisite overhead, 10% does not cover costs and that does not even account for theft, for which the retailer is responsible.

Maybe the newsagents who no longer sell newspapers have made the right move.

In the past when I have raised margin with newspaper and magazine publishers and mentioned supermarkets, they have said supermarkets get the same margin. When challenges, a couple have mentioned that there are other fees paid to supermarkets for stand placement or, back in the day, guaranteed checkout pocket placement. I am not sure if Nine Media has any such arrangement in place for supermarkets.

An adult retail employee working in a newsagency on a Saturday is paid $36 an hour or more. Assuming trading 7 days a week and considering average occupancy costs outside of a shopping centre, the daily rent and related costs for an average size retail newsagency will bet $250.00 or more. So in just these two cost points, a retail newsagency needs to cover $538.00 in costs. Based on the industry average GP% range of 28% – 32%, they need sales of $1,793 to cover costs.

But that’s not accurate as it’s based on average GP%. A product like the AFR on the weekend drags the average GP down. Newsagents selling it rely on better margin products, like cards that achieve 60% GP and more, and gifts that perform similarly, to subsidise poor margin products, like newspapers and magazines.

Publishers created the Australian newsagency channel in the 1800s. They controlled us for decades. Then, they abandoned us. Today, they disrespect us with paltry margins. They make matters worse with out of date practices that waste time and make us uncompetitive.

They price their product as if it has other benefits, like attracting shoppers. That may have been the case ten or more years ago, not today in 2024. Newspapers are offered as a service, a loss making service.

I suspect publishers treat newsagents this way because they know newsagents will not do anything about the situation.

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Newspaper distribution

What’s the situation with selling vape products in Australia?

This is a question I was asked yesterday when I was talking with a retailer who has vape products for sale. I directed them to the Therapeutic Goods Administration website. The TGA is the federal government agency with regulatory authority for therapeutic goods. Vaping products fall within their remit. Here’s some of what the TGA website covers on vaping products:

From 1 January 2024, the importation of disposable vapes will be prohibited, subject to very limited exceptions. The ban will apply to disposable vapes irrespective of nicotine content or therapeutic claims. It means that it will be unlawful to import disposable vapes on or after 1 January 2024, even if those vapes were ordered before 1 January 2024 and have not yet arrived in Australia.

The ban also applies to individuals who have ordered disposable vapes from overseas for therapeutic use under the personal importation scheme. A limited exception will apply to international travellers arriving in Australia to carry a small quantity of vapes for their treatment or the treatment of someone travelling with them under their care.

Disposable vapes that have been imported into Australia before 1 January 2024 may continue to be lawfully supplied in Australia subject to the following requirements:

  • disposable vapes containing nicotine that meet TGA requirements may continue to be lawfully supplied in Australia in pharmacy settings to a patient with a prescription in accordance with state and territory laws for prescription medicines,
  • disposable vapes that do not contain nicotine, or any other medicine, and do not make therapeutic claims, may be supplied by retailers generally, including vape stores, subject to state or territory law.

This will allow legitimate retailers of disposable vapes to run down their stocks prior to the Government introducing legislation in early 2024 to prevent the domestic manufacture, advertisement, supply and commercial possession of disposable vapes, to ensure comprehensive controls across all levels of the supply chain.

…

From 1 March 2024, the importation of all non-therapeutic vapes will be prohibited. This means that it will be unlawful to import non-therapeutic vapes on or after 1 March 2024 even if those vapes were ordered before 1 March 2024 and have not yet arrived in Australia.

In addition, the importation of all vapes under the personal importation scheme will end on 1 March 2024. From this date, patients will no longer be able to order vapes directly from overseas, even if they have a prescription.

A limited exception will allow international travellers arriving in Australia to carry a small quantity of vapes for their treatment or the treatment of someone travelling with them under their care.

Subject to state or territory law, non-therapeutic vapes imported before 1 March 2024 may still be lawfully sold by retailers generally, including vape stores, provided the vape does not contain nicotine or any other medicine, and does not make therapeutic claims.

This will allow legitimate retailers of non-therapeutic vapes not containing nicotine to run down their stocks prior to the Government introducing legislation later in 2024 to prevent the domestic manufacture, advertisement, supply and commercial possession of non-therapeutic vapes to ensure comprehensive controls on vapes across all levels of the supply chain.

The website for the Minister for health also comments on this, making the government’s position on vape products clear:

During 2024, product standards for therapeutic vapes will also be strengthened, including to limit flavours, reduce permissible nicotine concentrations and require pharmaceutical packaging. A transition period will be allowed for businesses to comply with the new requirements.

The Government will introduce legislation in 2024 to prevent domestic manufacture, advertisement, supply and commercial possession of non-therapeutic and disposable single use vapes to ensure comprehensive controls on vapes across all levels of the supply chain.

It’s clear that there is no future for vape products in retail outside of pharmacies selling therapeutic products.

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Ethics

No, it won’t sell here, it’s too expensive, our customers would never buy a $550 plush item, not in a million years.

Of course, it sold in less than a week, six weeks before we had to pay for the stock. And, we sold another one from the same range for full retail at $350.00. And, another after that. Oh, and another $1,000 from the range in less than a week of getting the stock. Now, in week two, more sales, more money made.

The mistake of the nay-sayer in the business was to regard it as a plush item. Okay, it is a plush item, but, people are bot buying it as a plus item, they are buying it as a collectible, a very special collectible – rare, celebratory.

They people buying are 35+, not your traditional plush shoppers. males, too – again, not traditional plush shoppers.

Now before you jump to conclusions, the success I am writing about here is in a small suburban newsagency. It’s not in a shopping centre. The area is middle class, skewing to an older age.

Imagine losing several thousand dollars in sales by saying no, it won’t sell here, it’s too expensive, our customers would never buy a $550 plush item, not in a million years, denying your business the opportunity. We do, though. I’ve done it for sure – said something won’t sell without trying it.

Now, I am not saying try everything. What I am saying is that your immediate instinct is to say no, check in with yourself. Question why you are saying no and allow yourself a moment to think you might be wrong.

Being open to something means thinking through the opportunities, it means researching:

  • The current interest in the brand.
  • Who else stocks the product.
  • Whether there is an online opportunity.
  • Allied products you may have or could stock.
  • The value of the demographic to which it may appeal.
  • The opportunity to attract net new traffic through the product.
  • The risk and wether you have capacity for this.
  • The possible upside.
  • A recall of how often you have been wrong before.

This may seem like hard work. In the contest of the product I am referring to in this post, in two weeks it is a $1,500 GP beneficial range that I am sure will track to be worth $10,000 – $15,000 to this one business through the rest of 2024. This is valuable. It’s a result we can expect because we did not buy in on the instant no thanks when first looking at the possibility.

Our local Aussie newsagency businesses should not be defined by our own ignorance, they can be more successful than our imagination sometimes allows.

What we can sell, how we can sell, when we can sell and to whom we can sell is different today then. a few years ago and to when our channel was created.

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Newsagency opportunities

Telstra Modem Model v7610 issue drags on, impacting some newsagency businesses

In December 20223 a number of newsagents reported issues accessing magazine supply electronic invoices. The issue was quickly isolated to being experienced by those with a specific model of Telstra modem. The specific problem was tracked back to having been caused by a Telstra initiated update.

Here we are in April 2024 and some newsagents continue to have problems. Most recently, it has related to the v7610 modem.

The challenge for impacted newsagents is that it an issue for Telstra to resolve, and their resolution has not been as forthcoming as it could be. Their call centra process is not geared to discussion about a problem. rather, they have a series of narrow questions and if your words are outside what they expect you can find yourself down a time-wasting rabbit hole.

XchangeIT is the newsagent partner most impacted with their magazine electronic invoices not getting through via the usual automated route. While they have a backup process, their hours are not a good fit for hours when newsagents might be doing this work. That said, their communication to newsagents on the issue has been excellent, as has their communication with newsagency software companies.

 

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Newsagency management

Putaways facilities in smart newsagency software offer newsagents a differentiating customer service experience

In your newsagency software you likely have facilities you can leverage to offer a point of difference. Whereas decades ago, cutaways facilities were essential and in use in almost all newsagencies, today their use is much less.

In the competitive world of retail,  offering a differentiating customer service experience is crucial for success. Smart newsagency software with putaways facilities can be your secret weapon in this battle.

Putaways allow newsagents to set aside specific stock for individual customers. This could be anything from the latest copy of their favourite magazine to a particular brand of cigarettes they only buy from you.

A customer registers for a product to put away, put aside, kept for them. When the product arrives, a label with the customer details is printed and placed on the product. The product is put aside in a safe place. The customer can be notified by email or text.

Putaways offer a range of benefits that contribute to an exceptional customer service experience:

  • Convenience: Customers know their favourite items will always be waiting for them, saving them time and frustration.
  • Loyalty: This personalised touch shows customers you value their business and encourages them to keep coming back.
  • Increased Sales: By highlighting upcoming releases or special orders, putaways can prompt customers to purchase additional items.
  • Reduced Shrinkage: Knowing exactly how much stock is allocated for putaways helps with stock control and minimises shrinkage.

While putaways are a powerful tool, managing them manually as newsagents did in the 1970s and before is time-consuming and error-prone. This is where smart newsagency software comes in. Newsagency software:

  • Electronically record customer preferences: Store customer information as to items they would like put aside.
  • Set up automatic putaways: Automate the process of reserving stock for specific customers, saving you valuable time.
  • Generate notifications: Alert customers when their put aside items are ready for collection, further enhancing the customer experience.

I mention it today as there are opportunities outside the traditional use of putaways – magazines, newspapers and artworks – where newsagents can use this part of the software they have to satisfy customers buying additional releases or issues of something that has a life beyond a single release. The software solution offers structure and consistency that other retailers in their software would be challenged to match.

Of course, I have a vested interest in that I own Tower Systems, the newsagency software company that I am grateful serves now more than 1,850 newsagents with newsagency software in Australia.

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newsagent software

Aussie stationery suppliers to newsagents are missing a valuable opportunity

There is the stationery people buy because they need it and then there is stationery people buy because they want it, the obligation purchase versus the emotional purchase.

Traditional stationery suppliers to our channel serve us well with stationery that fills a need. Most do not serve us at all with stationery that serves a want.

It is in this want or emotional stationery purchase space that we can make the most money.

The failure of existing stationery suppliers to our channel to offer stationery for the want / emotional purchase has plenty of newsagents looking elsewhere.

Our channel was built in the 1800s to serve a need. Today, serving what people want is proving to be an appreciated value-add for retailers.

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Stationery

Newsagents should be aware of the Viva Energy Australia takeover of SA’s On the Run

Viva Energy Australia has completed the purchase of the On The Run group, a network of 170 fuel and convenience businesses in South Australia that have a track record in the lottery space.

The merger amalgamates On The Run and well as Smoke Mart & Gift Box into Viva Energy’s convenience business, creating, as I understand it, a network of  1,000+ convenience retail outlets, including Coles Express, and Liberty.

This acquisition may have no impact on newsagents with lotteries or it may be a step to moves that do have an impact. On The Run outlets are good, consistent and broad in what they offer. Only time will tell what from the On There Run product mix makes it into the other outlets – like lotteries for example.

c-store.com.au offers good context:

Viva Energy’s CEO and Managing Director, Scott Wyatt, said today’s acquisition is transformational for Viva Energy and that OTR will become Viva Energy’s flagship convenience brand.

“The introduction of OTR’s superior convenience offering, including quick serve restaurants, will help revolutionise the diversity and attraction of our retail offering,” Wyatt said.

“As our stores increasingly become retail destinations, we expect convenience earnings will grow and reduce our dependency on traditional fuels.

“OTR outlets offer an attractive and welcoming store environment, supporting increased dwell time, which is likely to be a key factor in successfully introducing electric vehicle recharging facilities over time.”

What they are planning is what any retailer in channels impacted by change must plan: revolutionise the diversity and attraction of our retail offering.

My goal today is to ensure newsagents are aware of the acquisition, to be aware.

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Lotteries

The challenge with being part of a franchise or a national branded business

I was in a regional town New Zealand over the weekend for a wedding and went to a local Paper Plus store to buy a wedding card. I didn’t like any of the wedding card designs they had, the range felt tired, like the shop.

It was my first time in a Paper Plus for five years and as such it’s what I’ll think of as the standard for Paper Plus until I see something different.

The shop fixtures were old school – traditional gondolas, high with products stacked. There was no flair or enticement to the retail displays, nothing to draw me into the shop. The light was bright fluro, which is now out of date for interesting local retail. There was no sense of being local.

Franchise businesses and businesses that trade under a common shingle are as strong as their weakest store.

This is one of the reason newsXpress years ago ditched requiring businesses to trade under the newsXpress shingle. It is also why the group restructured its contract and its offer to not fall under the franchise code of conduct.

Local retailers need the freedom to flourish is ways appropriate to their local setting. In a franchise this is challenging to do since the franchise approach is about a cookie-cutter approach, based on what some call a ‘system’. I can’t think of any ‘system’ or franchise model that is appropriate in the newsagency channel today. That’s my opinion at least, others will have theirs.

Our channel is going through rapid change, much of which is outside the lines of what has been traditional for newsagency businesses. What drew people to our businesses even five years ago has changed in 2024. Change is good as it opens opportunities.

So much of the growth I am seeing in newsagency businesses that are growing is outside of traditional and this is where a ‘system’ or a franchise model created decades ago will struggle to be relevant. Retail in 2024 is not relevant to what we did in 2000, 1990 or 1980. How, when and where people shop has changed. What people will buy from what was once a traditional newsagency has changed.

Local newsagents need the freed to be what they can be. This is why I moved from a franchise model years ago.

Back in the day, Paper Plus was a terrific business a model for consistency and growth. If what I saw on Saturday is any indication, it has some distance to go to be relevant to 2024 – if not the group then certainly the shop I visited.

I love owning and running my newsagency businesses today, for traditional products but more so for the opportunity to play outside the lines of tradition.

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Newsagency management

The all important front window of the newsagency, or any retail business for that matter

The front window display of your shop is your headline. It announces you, defines you to those passing by for the first time and can catch the attention of regular and possibly store-blind shoppers.

Your front window display is your opening statement, your this is what to expect from us not.

The front window is the best place to play against assumptions about your business and the newsagency shingle more broadly.

The front window display needs to change regularly. How regularly will depend on your local traffic cycle.

I love this front window display from the awesome team at our Westfield Southland store.

This front window pitch introduces new products, excellent margin products. It’s successfully attracted new shoppers, which we love.

I think the best way to approach a front window as it being one of the most important marketing activities in retail. And, as local independent retailers, we can pitch a front window that feels warm – unlike the soulless windows we see in franchise and corporate chain stores.

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Uncategorized

If you think closing your newsagency is the only option …

Sometimes, the road ahead can appear to have so many obstacles and the air heavy with fog that a pathway can be hard to find.

If you feel like closing is your only option, I am writing this for you. It’s an update to something I have shared before. I share it today as a supplier asked me to remind folks here.

If you feel like closing your newsagency is the option, ask for a second opinion. I and plenty of others in our channel will do this, based on your business data: sales data, P&L, and more.

Usually, in the evidence of data is opportunity. The challenge is that often opportunities cannot be seen because of the noise of obstacles and fog.

My hope is that in your evidence there is sufficient opportunity to find a path forward for the business, and for you.

Turning a situation away from closing is my only option can only come about by one or a mix of:

  • attracting new shoppers
  • getting existing shoppers purchasing more
  • making more from some of what you sell
  • reducing costs

It’s pretty simple when you read the list. The hard part is the action, that’s where retailers can get stuck. I mean, attracting new shoppers is difficult, especially in small business where the levers we can pull are limited.

The best way to attract new shoppers is to introduce new product categories and to pitch these outside of the business.

I get that it may be challenging to find the energy and money to make things work with new products. If the survival of your business matters you’ll find a way.

The best way to get existing shoppers spending more is through a smart loyalty mechanic and having a shop people enjoy.

The best way to make more from what you sell is by charging more or buying better, or both. Don’t go crazy. A modest increase in GP% could work wonders.

While doing these things you also need to work on reducing costs. That’s a common approach to saving a business. While it could help, rarely in my experience have I seen reducing costs alone be enough to save a business. Sure, it can be in the mix, but it alone is not enough.

Key to the success of any turnaround is starting on the road early, before fog and debris block the past. It’s important to all of us who own businesses to be looking well ahead, over the horizon, cultivating assets we can deploy when we think change may be needed.

If you think closing your newsagency is the only option, reach out. There are plenty of us in the newsagency channel who will listen, and offer advice if you’d like it.

You are not alone.

Mark Fletcher
mark@towersystems.com.au mark@newsxpress.com.au
https://www.linkedin.com/in/mark-fletcher-tower/

6 likes
Newsagency management

6 tips to help drive the sale of journals in your newsagency

Gen Alpha and Gen Z are journaling more than Gen X and Gen Y according to some commentators in this space of journaling. And, among Gen Alpha and Gen Z, journaling is for guys and girls. Reading this a while back got me thinking since it challenges my assumptions about journaling, based on decades in retail.

I think it is time for a reset in our approach to journals in our shops. They and more than pretty notebooks.

Journals are creative outlets, productivity boosters, data recorders, lyric books, poetry books, brain dump spaces, therapy and treasured keepsakes. Journals mean something different to each person engaged. This is what we have to understand.

Fear not! Here are 6 tips to turn those passing glances into happy journal purchases:

1. Showcase the Spectrum

People journal for all sorts of reasons. Some crave a space for daily reflections, while others seek a bullet journal for ultimate organisation. Cater to this diversity by offering a range of journals. From classic hardcovers with lined pages to funky softcovers bursting with dotted grids and blank spaces, create a selection that caters to different styles and purposes.

Don’t forget niche interests: travel journals, gratitude journals, food journals, fitness journals, drawing journals, star sign journals.

2.  Be Seen, Be Desired

Place journals front cover facing at the counter. Yes, people will purchase on impulse.

3. Cross sell

Pair journals with pens, covers, book marks, posi-it notes and other items that make sense to purchase with them.

4. Storytelling Sells

Have a journal open on a table, preferably with a chair where someone can sit. Have a chair nearby. Encourage people to journal anonymously in the shop. Leet them experience it, and maybe get hooked as a result. Let your customers be their own storyteller.

5. Pitch on social media

Showcase journals on social media. Use this platform to speak to the range of journaling situations you cover: male, female, young, old, work, hobby. Be sure to show off your range.

6. Train Your Team

Make sure everyone working in the shop understand your products. Nurture in them a love of your pens and your journals and the feeling that comes from writing on the page.  If they journal themselves, give them a deal. This may help them talk about they own experiences journaling with shoppers.

By implementing these tips, you can transform your retail space into a haven for journal enthusiasts.

You are not selling stationery. Rather, you are selling keepers of memories and much more, things they will value for many years.

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Stationery

Sugar-free gifts popular this Easter

We did well with Jellycat, Squishmallows and other sugar-free treats this Easter. Card sales were excellent and customers loved the gift bags too. Our social media posts helped attract shoppers. Here are couple of the ready to go gifts we offered.

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Gifts

Time away from the business is important: don’t lose yourself in your business

It is easy when you own a business to get lost in the business, for it to become your whole life, to be solely how people see you.

It’s important that business owners have time for themselves, beyond family even.

This is on my mind today because someone commented to me this week that they think I work crazy hours for my businesses, saying they strive to do that for their business.

I don’t work crazy hours. A typical week is 60 – 70 hours. My recharge is what I do outside of work. It’s refreshing and enjoyable. Beyond family time, of which there is plenty as my commute to the office is 5 minutes each way.

My relax and recharge passion is writing. It has been for many years. I’ve had plays produced here in Australia, the US, Canada and Ireland and a couple of short films made, including Chasing Rabbits, which won a bunch of awards. There was even a musical adaptation of a play, which won a Green Room Award in Melbourne. There have been some awards along the way, which have been validating.

Most recently, my book, Not Dead Yet was published. This was a 4-year project leading up to publishing and then promotional activity following. It has nothing whatsoever to do with my businesses.

If you’re interested in this life outside of business, you could read Visiting Mum in her nursing home was a shock at first. I didn’t expect it to become a joy, an article the folks at Guardian Australia asked me to write for them in December last year, on a topic related to the book.

I am grateful to host David Hunt for the interview we did for The Art Hunter about the book:

And this podcast episode too for the Staying Alive & Rich podcast with host Maria Ugrinovski:

I mention these things to demonstrate activity far away from business, activity that offers other life experiences and perspectives that I find rejuvenating and enjoyable.

While I appreciate this post will read as promotion, which it is, it is primarily here to show that I value a life outside of business. I think all of us who own and run businesses need outside interests that do more to define us as a person than the businesses themselves.

For sure, business is important is provides for so many who rely on it. I guess my point is that you rely on you and allowing yourself to get lost in business is unhealthy.

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About us

Is there a move away from deep discount retail and what could it mean for us?

The recent announcement by Dollar Tree, Inc., the parent company of Family Dollar, to close 600 stores has sent ripples through the retail industry in the US. I am sure it has plenty of Aussie retailers watching on with interest.

Not only are they closing 600 stores, the company announced will also shut down 370 Family Dollar and 30 Dollar Tree stores when each store’s current lease ends. That’s a lot of closures for a business that is a significant player in the deep discount space.

This move has many wondering: Is this the end of the deep discount retail model, or just a strategic shift for Family Dollar?

In Australia, deep discount is national represented by the Reject Shop. Locally, the model is represented by the many of what we call $2 shops, or junk retail is , I suspect unfairly, call them.

I think we are seeing a shift in this deep discount space. Online is playing a role, especially Temu from China.

I do note that Dollar Tree itself remains committed to the deep discount market. They’ve emphasised that the closures are designed to strengthen Family Dollar, not abandon the concept entirely. But they have also said they want to drive business financial performance.

It’s possible the deep discount space might be reaching a saturation point. With so many discount retailers vying for customers, some consolidation may be inevitable.

While affordability remains important, shoppers might be prioritising quality  over the rock-bottom prices traditionally associated with deep discount stores.

We will have to see what plays out in Australia.

Here’s what we know though – discount variety shops, $2 shops, deep discount shops, regardless of what you call them, focus on selling at the lowest price. That shopper will not be loyal unless your price remains low. So long as there is someone desperate enough to go lower, you’ll find shoppers today gone tomorrow. This is one reason I have never played in the discount space in retail. I don’t see how there is sustainable profitability in it frankly.

I think online, Temu and others, as well as local independent $2 shops will keep pressure on this slim margin channel. I think this means retailers in this space in Australia will find it tough. We can make it tougher for them if we continue to focus on quality products sold at a better price and likely a price that has a lower cost when you consider valuable product lifetime. People notice this.

For me, value is more about quality than the ticket price of the item. They key is for us to communicate this in an understood and cut through way to our shoppers in-store and those we seek to attract.

Pitching solely on price is weak, and we can exploit this.

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Newsagency management

How to save money on fixtures for your newsagency or any retail business

First up: spend as little as possible with a shopfitter, preferably nothing. Shopfitters only make money from shopfits. What they make is purpose built and, naturally expensive.

Besides the people who work in the business, your products are what matter the most. People notice the products more than the fixtures. Shopfitters will tell you something different, of course.

Years ago, it was common for newsagents to spend $1,500 and more per square metre of leased retail space, and we would do this for fixtures made for the business. magazine specific fixtures, card specific fixtures. There was plenty of noise that the shift made the business, set the business for success. Some groups considered their shopfit to be valuable intellectual property. Even if that was true, it’s not true today.

Today, retail is about the feeling of the shop and nothing achieves feeling like furniture items that look everyday. Even better if they have some scars that bring some lived history to the shop. Indeed, some of the best fixtures I have seen have been found on the side of the road, at an old farm or in an op. shop.

The more fixtures in your shop the are sourced from these everyday situations, the lower the cost of fitting your shop.

Take this table and bench set. It costs only $179 from Fantastic Furniture. I suspect there may be secondhand ones out there for less and other pliers with similar for less.

It’s tremendously flexible. Here it is in the window of one of my shops right now.

The table and benches work hosting these ducks.

The best advice I can provide when it comes to shoplifting in a newsagency or and local retail business is to be frugal.

  • Pre-loved is loved: Look for second-hand furniture and fixtures at op. shops,  garage sales, or online marketplaces.
  • Upcycle & Repurpose: Get creative! Old pallets can become shelving, crates can be turned into displays, and pipes can make clothing racks.
  • Think Multi-Functional: Invest in furniture that serves multiple purposes, like ottomans with storage or tables with built-in displays.
  • Buy off the shelf rather than purpose built every time you can. This is the best way to save money.

There are some in our channel who boast about their shopfit, what it cost, what is unique about it. I suspect if they were as open about the financial performance of their business few of the boasters would have must to boast about.

While there are parts of the business over which you have control, like lotteries, there is plenty over which you do have control. Don’t overthink it. If you fit out frugally the cost pot changing your approach is not that much. Also, being able to financially justify constant change can help give the business a feel of regular change, which is good.

Oh, and if you really do need something made specifically for your shop, consider a local handyman (person) as they are likely to cost less.

Anything you spend on fittings or furniture for your shop needs to be fully recouped from sales in absolutely no more than three years, preferably less.

19 likes
Newsagency management

Let data guide whether you open over Easter

Look at your sales last Easter before setting the newsagency staff roster for this Easter. If you can’t cover your costs, including real labour costs regardless of whether you do the hours yourself or not, don’t open.

Back in the day, newsagents would open out of obligation, as a community service, or because of supplier dictates, or both.

While it is nice to run your business as a community service, that does not pay your bills nor does it support you as you may need.

With penalty rates, a casual employee working on a public holiday is paid 250% of their base hourly rate. Based on the current General Retail Award Rate that would be $57.78 an hour – plus superannuation, taking the hourly cost to $64.14. This is for a Level 3, which would apply if they are opening or closing.

Opening because you think shoppers may expect you to open is not reason enough, nor is opening because you always have. The only reason to open is because it commercially viable.

Now, to newspaper and magazine publishers and staff reading this, you are part of the problem here. Your paltry margins are insufficient on a regular day let alone on a trading day attracting a 250% hike in the hourly cost of labour.

3 likes
Newsagency management

More suppliers are going direct to consumers competing with retailers they supply, and it’s breaking long term relationships

Imagine the shock of seeing a supplier offer products they wholesale to you being offered to consumers for not much more than your wholesale price.

The shock turns to anger when it continues months later, with the supplier competing with you for Google ad positioning. They can spend more since they have more margin with which to play.

Their words of no we are not trying to take business from you and we only want to grow the marketplace don’t land as you see customers you have nurtured for years switch to them.

As I told one supplier representative, what they have done in copying our business and chasing our customers disgusts me.

All of us in business have to put our needs ahead of everyone else and that is what this supplier is doing. The thing is though, they get childishly upset when we reduce our commitment to them having found a more valuable relationship elsewhere.

Maybe it is just meh but it feels like, in these early months of 2024, that we have more suppliers going direct to consumers.

Some suppliers are getting it right. One I spoke with this week who was pitching for our business said up front that they sold direct but at a price that was 10% higher than the suggested retail price they had on their items. What I liked even more was that their products, at their suggested retail price, gave us a gross profit of 62%.

This supplier is smart to structure their retailer relationships and their own online pitch such that it’s a genuine win win for supplier and retailer.

Not enough suppliers think through how to approach selling direct.

Some don’t announce it, they sneak around thinking retailers will not notice.

Some use spin from marketing to make it sound like retailers will benefit.

Some lazily copy what they see their retailers are doing and refuse to acknowledge they have done this.

Where the move has been made poorly, ignorantly and / or selfishly, it is understandable relationships break down. Trust is challenged and retailers who do not trust a supplier will not want to do business with them.

Each of us in business has to make decisions that serve our business and those who directly rely on it first. We need to be honest in our decision-making and respectful of long term relationships – if our decision means a change, we need to be upfront rather than secretive.

In my own case, I am more invested in seeking out direct supply relationships, from manufacturer direct to us rather than through a wholesaler who control a brand in the country. I am also happier working with suppliers who have no commitment to go direct to consumers.

Disruption is here to stay. Our role as business owners is to navigate this to our advantage.

7 likes
Ethics

Hey magazine publishers here’s how to use social media to pitch retailers, preferably newsagents

British publishers appear to be more engaged in marketing that pitches retailers than their Aussie counterparts.

Are media and Lovatts are the two biggest Aussie crossword publishers and they each offer cash prizes. This ad above is something they could easily do if they wanted to drive retail sales.

There are many Aussie craft titles for which I can’t see any pitches like the one above.

I can’t figure out why Aussie magazine publishers are so disinterested in newsagents.

4 likes
crosswords

Buy Now Pay Later disappearing as fast as it arrived

The release by the government of the new Buy Now Pay Later (BNPL) regulations proposed, the retreat from offering BNPL products is expected to be swift.  BNPL businesses lose access to some of their revenue drivers:

  • Late fees capped at $10 per month (Afterpay currently $68).
  • Annual fees capped at $200 in year 1 ($125 thereafter).
  • Australian Credit Licence required.
  • Real credit and affordability checks.

We have already seen moves of retreat. Humm, for example.

Click here for the explanatory document from Treasury explaining the changes. Click here to see the draft legislation.

What does this mean for us? BNPL helped people purchase who didn’t want to use traditional credit or LayBy. To retain these shoppers retailers will need alternatives. While the banks have adjusted and are planning more in this space, we could consider refreshing our approach to LayBy. Doing nothing is not an ideal approach.

3 likes
Newsagency management

Pitching local through what we sell

There are many ways to pitch local in retail: buying from local suppliers, supporting local community groups, speaking to your localness. These are all good ways. certainly, show, don’t tell is a good approach to pitch local. I think people are tired of the lazy social media post from a local retailer asking people to shop local. We need to show reasons.

One way we are doing this in my shops is with locally personalised signs designed to inspire dreams of travel destinations. Here’s the sign i9n the window of our Malvern shop.

No other retailer in Malvern has this. I can say this with certainty since we commissioned the product, choosing the list of cities carefully.

The sign is a talking point, as well as a fun gift for someone who does enjoy travel, or dreaming of travel. It also speaks to our localness without telling people to shop local.

It’s a small move, one already we are seeing working well for the business.

There are so many ways we can be smart about pitching local without overtly pitching local in our shops. The more we do this in smart ways and the less we see retailers calling people to shop local the better in my view. Those social media posts almost begging people to shop local are tiresome. I’m not aware of one ever working in a way that is measurable.

Show, don’t tell really is the best way to pitch local. Locals need to feel it without being told, without it being shoved in their face.

On the sign we had made, it sells for $19.99 and has a GP of 75%, which we are happy with.

4 likes
Newsagency opportunities

Beyond the Need For a Pen: Selling Stationery to the Joy Seekers

If you stock stationery to serve a functional need, this post has been written for you.

I like pens and have more than 200 of them. Most are unused. When I am in a good stationery shop, I am likely to buy another pen. I go for colour, weight and how it feels across paper.

I also like notebooks and journals and have more than 100 of them. I go for small format, few pages, nice feeling paper and something that I can easily travel with.

I buy these things because I love them, not because I need them.

We all know people like this. Those who walk into a stationery store and emerge with items they did not need, but items they love.

I have a friend who buys stationery by colour, a specific colour. They gave boxes of it, and want more.

I met someone recently who buys sticky notes. They have a collection of more than 400. They want more.

While you can make good money selling stationery to whose who need it, the everyday stationery we all stock, there is this other, sometimes more lucrative market, some of us miss serving.

Here are a few tips on tapping into this opportunity:

  • Focus on the Experience. It’s not just a pen, it’s an extension of their personality. Highlight the smooth glide of a gel pen, the luxurious feel of heavyweight paper, the whimsical designs that spark inspiration.
  • Embrace the Unique. Cater to the collector’s heart. Offer limited edition lines, locally-made artisan products, or quirky finds you won’t see anywhere else.
  • Curate, Don’t Just Sell. Become a trusted source of inspiration. Feature themed collections, recommend perfect pairings (like a specific pen for that incredible notebook), and showcase how these products can elevate their creative process.
  • Speak Their Language. Use evocative descriptions that go beyond functionality. Talk about the “satisfying snap” of a good binder or the “velvety caress” of a high-quality pen.
  • Don’t Forget the Fun. Host workshops on calligraphy, sketching, note taking, letter writing, bullet journaling, or creative writing. Offer gift-wrapping services that turn a simple pen into a delightful present.

Remember, you’re not just selling stationery, you’re selling a feeling. You’re offering a chance to indulge in a little luxury, to spark creativity, and to express oneself through beautiful, well-crafted tools.

When considering buying inventory for this lover of stationery, approach it with a different mindset. Don’t look at it as functional stationery. Look at it as stock items that bring joy to others. Take care. Take your time. There is plenty of opportunity here.

This is a big opportunity for Aussie newsagents.

3 likes
newsagency of the future

Newsagents have the best Easter cards in Australia

If you are looking for an Easter card, your local newsagent is the best place to shop and there’s why:

Your local newsagency is likely to have the best range of cards available.

 

Range matters when buying an Easter card or any card because range gives you choice. Whether is a religious Easter card, a funny Easter card or a money wallet for Easter or an easter card sharing love, your local newsagency has Easter cards for many situations.

Plenty of people use Easter as an opportunity to send a hug to someone they care about. Cards in your local newsagency provide options for this.

A bonus is that many newsagents stock Easter cards that are made in Australia. If supporting Australian jobs and Australian businesses matters to you, buying your Easter cards in your local Aussie newsagency supports this.

Now, if you are wondering why should I send an Easter card this year, here are some reasons:

  • For many, Easter is a time for joy, hope, and new beginnings. Sending a card is a way to share those feelings with others, even if you can’t celebrate together.
  • Respecting the season. Easter is an important time on the religious calendar. A card and let a loved-one know you respect that.
  • If you have friends or family some distance away, an Easter card is a thoughtful way to let someone know you’re thinking of them.
  • It’s a tradition: Exchanging Easter cards has been a tradition for many years. It can be a nice way to connect with that.
  • Easter cards aren’t just for religious folks. Many cards feature springtime imagery or secular greetings that anyone can appreciate.
  • Make someone smile: A handwritten note or a funny Easter card is a guaranteed pick-me-up for many people.

Remember, the Easter card you send will hole a memory they are likely to cherish for many years to come. Write something memorable, so these memories of you live on years later when they open the old shoebox and find this year’s easter card.

Footnote: I have written this post for Google as people go there to ask where to buy Easter cards.

4 likes
newsagency marketing
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