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

Author: Mark Fletcher

What products do you have that you would not suggest newsagents sell?

Asking this question of several suppliers over the last few months have revealed plenty of products that we and some other newsagents have got on to stock, and have sales success with.

Many suppliers are clueless as to what newsagents can sell. I think this is because they are clueless as to what plenty of newsagency businesses have become today.

Every supplier I talk with, I ask What products do you have that you would not suggest newsagents sell? and hope that their answer will reveal new opportunities.

Too many have a bias against items costing more than $50 when pitching for our channel. Some have bias against items of quality. While it is frustrating to see this ignorance on show, it does demonstrate that at least asking the question can get to a solution.

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Ugh!

Crazy anti maskers put lives at risk

Given the anti mask rallies in Melbourne last weekend and that they grew out of similar rallies in the US, as reported in the media here, I wonder if we will see in-store idiots like these people in a Florida Target store a day ago. I know plenty of retailers who have had to deal with individuals. A group this size is a whole other thing.

#idiots

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Social responsibility

Crosswords the hero magazine category in Aussie newsagencies in corona impacted 2020

Crossword magazine sales continue to surge in newsagencies, more so than any other magazine category.

Crossword unit sales are up around 60% year on year and are tracking at around 8% of magazine revenue, up from what has been usual.

Since other magazine retailers offer nowhere near the range of crossword titles found in newsagencies, this is good news for our channel.

Plenty of newsagents are leveraging the opportunity by ensuring crossword titles are in the best location and always kept fresh. This makes sense.

Based oil what I see in jigsaw, craft and related product sales, I suspect crosswords will continue to be strong for months to come. Certainly, that’s what I’ve factored into our own space allocation and promotion plans. And, yes, we are promoting crosswords outside the business as they work as a traffic generator.

Now, before anyone comments, I’m not happy with them paltry margin, not happy at all. However, I’ll take the traffic the category generates for now.

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crosswords

What is happening online for newsagents through Covid?

As newspapers and TV shows have been reporting retailers across Australia are growing online sales. Here are three current examples from the newsagency channel:

  • A newsagency business I know launched a niche category website in May. In August they booked almost $4,400 in revenue with almost all of that coming from outside their town.
  • Another newsagency I know launched their niche category website in late July and in August they booked just over $1,000 in sales with all of that from customers outside their town.
  • Another newsagency I know, with a website established for two years, did $15,000 in online sales in August. This is more than double what they did in August 2019.

In each case above, none of which are my businesses, the website is not serving a core newsagency product category. That’s not a bad thing. I mention it, rather, as an indicator that the newsagents involved have chosen for their online focus categories not historically traditional for our businesses.

There are also plenty who have gone online and not achieved success yet. It takes time and commitment – websites are hungry beasts.

Online today is a bit like the gold rush in Australia in the 1800s. Unregulated and frenzied. Online is packed with opportunity though and this is where smart retailers, and smart newsagents, are winning.

Through online, newsagents have an opportunity to play away from the shingle and through this to gain experience and relationships that can be leveraged for the shop, or not – depending on the plans for the business.

The most important benefit about online is the ability to drive additional revenue with any additional labour or occupancy costs. This leaves more GP on the table for the bottom line.

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Newsagency opportunities

Surge in foreign language newspaper sales

While the dataset is too small to declare a statewide or national trend, there is an indication that foreign language newspaper sales are surging. If this is a trend, it’s good news for newsagents as we are the go-to locations for these niche titles. Their success is our success.

Looking only at high street located newsagencies, newspaper sales overall are up. The actual number varies considerably between locations.

Within the newsagency sales data, sales for international / foreign language newspapers are up the most, by far, in every business I looked at.

In one high street store, for example, overall newspaper unit sales are up 11% in the April to August months of 2020 compared to 2019. Foreign language titles are up 29%. They account for 12% of all newspapers sold.

My suggestion to newsagents is – check data to see if this is the case. Leveraging this, you could consider:

  • Promoting foreign language on social media. I suggest one title per post. Include a photo of the newspaper.
  • From time to time, placing them at the counter.
  • Looking at what sells with foreign language newspapers. This basket data can be insightful.
  • Considering expanding your foreign language title range.
  • Ensuring you offer appropriate allied product.

I get that focussing on low margin product that accounts for 12% of a small product category may not make sense. However, it is in these niche areas where we can encourage valuable shopper loyalty.

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Newspapers

Hugs matter in 2020

Selling hugs is easy for newsagency and gift retailers in 2020 thanks to a terrific and expanded range of huggable product from several suppliers.

From small pocket-size items through to the large bright slow release squishy items like in the photo, selling hugs has been made easy this year.

In a year on year sales comparison of all huggable related products, we are up 30% on last year. Again, this is especially driven by the newer squishy items.

What is particularly interesting is the demographic appeal as there is the user shopper – younger kids 6 to 12, parents, aunts and uncles as well as grandparents. This broad shopper appeal makes the products space, capital and labour efficient in-store.

I find thinking about products in the context of how they are used helps with buying, merchandising and out of store marketing. This is why we use the category of huggable. It keeps us focussed on the outcome.

In a year when hugs matter more, it makes sense that this category is doing so well.

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Gifts

Landlords and developers evolving how they pitch retail locations

I hope this video I received this week pitching a new shopping centre location. It’s an example of using smart tech to take us into a new development to get a visual feel. Sure, it’s marketing and glossy, but it’s also more enticing than a text email or a brochure. I know retailers doing things with video for their stores, with success.

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marketing tip

Making your own success

This story in The Age today is a terrific example of what making your own success looks like.

Out-of-work actor turns to art… with 300,000 TikTok followers
They say when one door closes, another opens and Melbourne actor Nathan McCarron is living proof.

When his acting dreams fizzled due to the COVID-19 pandemic and he even lost his day job booking jobs for tradies, McCarron, 28, turned for solace to his other passion: drawing.

It began just as a hobby, but an experiment filming his sketches of celebrities such as Taylor Swift, and uploading them to video-sharing app TikTok, “blew up”.

He was swamped with requests to draw the likes of pop superstars Billie Eilish and Ariana Grande and six months later he has turned the lemon of lockdown into lemonade.

McCarron’s TikTok page, Nathan’s Art, now has 300,000 global followers.

His little videos of between 15 seconds and one minute long, mostly portraying the sketching process, are attracting an average 1.6 million views.

This relates to newsagents in that is reflects someone who could no longer make a living from their core activities so they pivoted. While they are not making a living yet, they are headed in the right direction.

In the situation of our channel, the decline of core foundational categories has been slower than Cortona has been for many this year. However, for many newsagents, the pivot has been slower, too.

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newsagency of the future

Website Q&A / workshop today @ 10:30am

Today @ 10:30am AEST my newsagency software co. is hosting a free workshop / Q&A that may interest you. Anyone is welcome:

Free workshop: Web link Q&A.
Today, Friday, we host a website Q&A @ 10.30am AEST. We’ll answer all your questions about the link as well as Shopify and related questions as much as we are able. Whether you have a website or are considering one, this could be a beneficial session to attend. Here are the details to join:

https://zoom.us/j/97341499988?pwd=R0UyQ3o2V1VDaEpTcGcwM1lQMUpIZz09
Meeting ID: 973 4149 9988 Passcode: 514210

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Newsagency management

How much do newsagents make on lotto?

How much do newsagents make on lotto? is another popular question people put to Google through a search. Indeed, there are at least 50 searches every day in Australia for this.

The short answer to How much do newsagents make on lotto?  is … not much.

The actual percentage varies by type of product and location. That said, it is less than 10% out of which the newsagent has to pay for:

  • Retail space. With lottery counter space and related requirements taking 15% – 30% of retail space and leases costing $50,000 in high street and $250,000+ in shopping centre situations, the cost can be high.
  • Labour. The average hourly cost is $24 Monday to Friday and around $45 an hour on Sundays.
  • Some technology.
  • Insurance. This can cost several thousand dollars a year.
  • Operating overheads like power.
  • Ancillary costs such as cash holding for prize payouts.

For many newsagents, having lotto is good as it provides a base core traffic to the business. Smart retailers leverage this traffic for other purchases. However, this is challenging as there are strict rules newsagents have to follow as to what products they can put where. They are not allowed to create a barrier to lottery product purchases.

The real drivers for what newsagents make from lotto are labour cost and rent cost. Newsagents who can control these to minimise costs of both while maximising sales are in the better position. There are plenty able to do this.

In many newsagencies with lotteries, they have staff dedicated to this service. This means they are not able to maximise the labour cost by selling more expensive and better margin products. Lottery customers want to be served quickly. hence, the need for the lottery counter to be staffed at all times. Customer service is a key reason people purchase lottery products in a shop.

So, in answer to the question How much do newsagents make on lotto? I am not saying it is nothing or bad. Rather, I am sharing that there are real business costs that eat into what newsagents make from lotto and that it takes astute and attentive business management to maximise the opportunity while providing the level of service key to growing revenue.

Not all newsagents have lotto in their business and lotto is often available in retail businesses other than newsagencies.

The best customer experience with lotto is over the counter, being served by a human, someone knowledgeable about the games and able to have a chat with you. This is personal customer service newsagents are known for.

Note: I own Tower Systems, newsagency software company.

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Lotteries

How to become a newsagent

How can I become a newsagent? This is an interesting question that close to 100 people type into Google in Australia every day.

If you want to open a newsagency business, you need to organise supply of newspapers, magazines, lotteries (if you want those products), stationery, greeting cards and anything else you want to sell.

There is no one place to do this. The relationships is the list, lotteries, newspapers, magazines etc. are supplier driven. There is a formal approval process to go through, often requiring some form of financial security.

It can feel daunting if you are going it alone.

If you join a group they may help you navigate the processes. Update: I’m the owner of the newsXpress newsagency marketing group.

The training process, too, is broken in that lotteries has their training requirements and if you are in this category then their training will be the most important.

For me, I think that it is what you do outside what has been traditional for the newsagency channel that matters since those categories are where you will get most future growth and GP%.

So, if you are looking to open a newsagency business or convert your business into a newsagency my advice is to research fully the product categories you wish to offer and talk with the suppliers to see if your location and business suit what they could be looking for in an approved retail partner.

Back in the day, the best initial entry point was newspapers, through the local council controlled by the publishers, followed by the magazine distributors. Today, papers and magazines are straightforward to organise and this is done through local distribution agents.

If you want lotteries, start there. Tabcorp and Lotterywest have structured publicly accessible processes, which you should thoroughly research.

Back to the Google searches. It is interesting seeing these, this number, daily. It is one of a bunch of keyword searches that demonstrate strong interest in retailers joining our channel.

The number of searches has not changed much through 2020, so it is not a Covid thing. There has always been good interest. In part, this is driven by developers looking for our channel to be represented in new developments.

If you are looking to open a newsagency or convert a business to be a newsagency, do your research, take your time, ensure you are sure in your own mind about the business you want to create.

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Newsagency management

Police crack down on Victorian retailers breaking the rules

Police have shut down retailers who changed what they sell to ‘allow’ them to open in stage 4 lockdown. I have heard about this from several high street locations.

In a couple of cases, newsagency businesses were open and nearby gift and card competitors took on some food products to justify opening.

It’s good the police got involved and enforced the stage 4 rules.

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Social responsibility

Are Kmart executives clueless

I was surprised to read this at The New Daily this afternoon:

Kmart comes out swinging against Premier Daniel Andrews
Retail giant Kmart has accused Victorian Premier Daniel Andrews of taking it by “complete surprise” by continuing the state’s coronavirus restrictions, and pledged to stand by its staff until its stores reopen.

The continued closure of shops across the Melbourne metropolitan region as part of Stage 4 restrictions have hurt retailers, with Kmart joining a chorus of business leaders criticising the Victorian premier.

Kmart managing director Ian Bailey said the unprecedented conditions had caused immense pain and hardship for the retail giant’s staff.

“The Victorian government’s roadmap for re-opening the state economy announced last Sunday took the retail sector and Kmart Group by complete surprise,” he said on Wednesday.

“We were not provided with any forewarning in relation to the massive extension to the continued closure of retail trading that was announced.”

I say surprised because the announcement of the extension by the Premier Sunday at noon was in line with my expectations and others in small business. Kmart should have better insights than me and many others in small business retail. Yet, we expected an extension based on the infection numbers we had been seeing.

Covid is a health emergency and the health issues need to be resolved first, ahead of big businesses moaning to be open.

I’m kind of surprised Kmart is closed when the Reject Shop is open.

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Social responsibility

Doctor Who saves Sydney retailer

Click here to read a story from the ABC yesterday about a Sydney retailer’s business being saves by specialising in Doctor Who products.

A Sydney retailer has survived the coronavirus pandemic thanks to a unique line of products: small plastic Doctor Who figurines.

The Who Central shop in Sydney’s north-west has seen record sales in recent weeks, selling out of most products and propping up its main picture framing operation in the shop next door.

Regulars here would now that I am a big fan of licences product. Over the years I have written about success with Disney, Harry Potter, Doctor Who, Star Wars and other licences.

From a newsagency perspective we can leverage these licences across multiple categories: greeting cards, games, stationery, figurines and more. Those who so well, telling a good story, often do well.

Right now, for example, in one of my shops we have a full display of Harry Potter products. We’ve been in this space for several years and have not left it because it sells.

A mistake I see retailers make is the assumption that they doppelgänger’s not have customers who love a particular licence. I say that’s a mistake as we continue to discover our little we know our customers, Also, we often do not know those our customers could buy for.

Specialisation in retail matters. Regional newsagency businesses are particularly well placed to leverage this.

Read the ABC story. It’s inspiring.

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Newsagency opportunities

I can’t believe a customer did that!

Here in Melbourne stage 4 today…

A customer at the newsagency counter pulls their mask down to lick their fingers before pulling a note from their purse to pay for a purchase.

Naturally, the response is – sorry, we are cashless.

This is not an isolated story. All through corona I’ve heard stories from retailers of customers doing similar – licking fingers, holding their credit card in their mouth while they reach for something else.

People spread the virus, especially stupid people.

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Social responsibility

Using inventory to extend the reach of the business

We imported this unique nativity set recently after we saw it at the Atlanta Gift Fair in January this year. It is not your usual nativity set. It’s weighty, beautifully hand-finished, strong in detail … well deserving of the $349.00 price point.

In the few days we have had it in-store it’s become a popular talking point with several customers considering the purchase. On social media, too, is driving interest.

We signed up to buy the piece to be part of a planned Christmas display feature;. We made that decision before corona was front of mind.

Based on the interest, we expect to sell this ahead of Christmas, reminding us that items we purchase for display purposes often, themselves, are sought after by customers.

With boxed Christmas cards arriving in-store, and selling, having this beautiful nativity piece on display has a place, even if we are weeks away from our more complete Christmas pitch.

Our approach with this $349.00 piece is in line with our broader approach to gifts. With the Reject Shop our closes competitor across several categories, we decided years ago to play in a different price-point playground. We’ve done this because we know people buying based on the lowest price for something are not loyal. Quality matters to us and to plenty of our customers.

But back to our nativity piece. What people often comment on when they see it is the quality. It is a truly beautiful piece. It does not feel factory produced. This, coupled with knowing it will not be found elsewhere, makes it valuable for us while we have it.

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newsagency marketing

Your own personal newsagency: the $14.99 a month all-in newspaper and magazine subscription

With the Apple News App, for A$14.99 a month for up to 6 family members you get access to a ton of Australian and international magazines and newspapers. All current issue content.

This from the Apple website outlines the content:

Apple News+, a subscription service that brings together hundreds of popular magazines and leading newspapers into a beautiful, convenient and curated experience within the Apple News app, is now available to Australian readers. Apple News+ presents full access to the best and most relevant publications to meet any range of interests from major Australian outlets including The Australian, The Daily Telegraph, Herald Sun, The Courier Mail, The Advertiser, Vogue, Australian Women’s Health, Elle, The Australian Women’s Weekly, Harper’s Bazaar Australia, GQ, Australian Men’s Health, Delicious and Australian Geographic, as well as several international newspapers and magazines including The Wall Street Journal (US), Los Angeles Times (US), The Times (UK), The Sunday Times (UK), National Geographic (US), Rolling Stone (US), Grazia (UK) and Hello! (UK).

Apple pitches it as your own personal newsagency:

Given that News Corp. wants compensation from Google and Facebook for taking revenue from them, maybe they offer newsagents compensation for their Apple relationship taking revenue from our channel.

Further on at the Apple website they detail more content:

Apple News+ subscribers can access current and past issues and individual articles from magazines such as Vogue Australia, Harper’s Bazaar Australia, Australian Women’s Health, The Australian Women’s Weekly, Elle, GQ Australia, Australian Men’s Health and Delicious. Australian subscribers can also access international newspapers and magazines including The Wall Street Journal (US), Los Angeles Times (US), The Times (UK), The Sunday Times (UK), Forbes (US), Esquire (US), Rolling Stone (US), National Geographic (US), New York Magazine (US), The Hollywood Reporter (US), Empire (UK) and Grazia (UK).

In reality this is another platform offering access to multiple titles for one subscription fee. These sites demonstrate the scope of the challenge to disruption of the print medium and the extent of fractional business publishers will embrace to extend the reach of their content.

There is nothing new here. It’s been happening for years. I mention it today as someone new to the channel was surprised to discover it is a thing.

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Media disruption

That the economy is in recession does not have to mean doom and gloom

News platforms are bursting with stories about the recession Australia is now in. There are the headline stories based on the numbers and the personal stories of people losing their businesses and homes.

It is easy to get drawn into the doom and gloom news cycle. Unfortunately, news outlets think bad news drives clicks, and, so, they run the stories.

In our local communities, I think it is helpful that we act against feeding the doom and gloom stories. It is helpful that we do nothing to negatively impact consumer confidence.

My suggestion is: focus on what has been working for you in 2020, present as business as usual, bring in new product, change displays, host in-store events, be active on social media, play happy music, run competitions, be a good local retailer.

It is these types of activities that distance your business from negative perceptions relating to the recession.

Yes, this is a tough time. Worrying about it being a tough time will not help you move through it.

You can’t control that there is a recession.

You can control what your business does. That has to be the focus.

I have been through two recessions in business. Each was different. This time around it is expected to be worse because of the global Covid situation. The reality is that for many newsagents, there are elements of Covid that help your businesses. In many newsagencies, revenue is up in 2020 so far. This is good news.

Be attuned to opportunity. Also, keep a low profile as no one likes a bragger during times of adversity.

Sure, the economy is in recession. I’m sure that in plenty of newsagency businesses there is plenty of good news.

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Newsagency opportunities

2021 year of the Ox 1oz gold coin out now and attracting interest

We are grateful for the opportunity to offer the just released 2021 $100 1oz Gold Proof Domed Coin – Lunar calendar – Year of the Ox from the Royal Australian Mint. This Lunar Year of the Ox 2021 $100 Gold Proof Domed Coin sells for $3,630.00. It is beautifully boxed and is appropriately stored in a locked cabinet, along with other collector coins from our Royal Australian Mint range.

Coin collectors are terrific customers. Newsagents have served them for decades as magazine customers. Now serving them with proof coins and collector items like this $100 gold domed coin is a real treat.

Can a newsagent sell a $3,630.00 coin? Yes, I think so.

The detail of this product is extraordinary.

We sold 100 of the Qantas centenary anniversary coin sets and they were priced at $180.00 each.

What I like about the products from the Mint is that they span entry level through to avid collector level. At the collector level, people will often purchase two or more of a new release. This is especially true for grandparent collectors who are purchasing for grandkids.

Coins are another category of expansion for engaged newsagents. Key to success is early access to embargoed release information as well as to insights that you can leverage for attracting shoppers you may otherwise not attract in your business. Because, after all, it is net new traffic that we are really after.

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newsagency marketing
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