Management tip

• Giving some other business control. Outsourcing your social media posts to another business, a consultant or a marketing group results in generic and often bland posts that are likely to deliver little commercial value to the business.
• Not entertaining. People use social media for entertainment. If you’re not entertaining the engagement you see is likely to be minimal. Bland posts about a new lottery jackpot or showing a magazine cover that many others show is a nothing post.
• Ignoring local. Living local through your posts is likely to be loved by locals. Support local community groups. Celebrate local heroes. Be out and about locally using what you sell, and share it.
• Yelling. Telling people to use cash or to shop local are posts likely to be ignored. Posts like this may make you feel good but they achieve nothing.
• Missing in action. You are a key differentiator in your business. You need to be seen through the posts. help people to get to know you and have a laugh with you.

With any social media post you have a couple of seconds to grab their attention. I spent a couple of hours last night looking through newsagent Facebook pages and I tagged 75% of posts falling into one of the above 5 areas. That does not allow for the 33% of newsagent pages I saw that infrequently posted, like the one business that last posted in January this year.

The best face to put on your business is you. On social media, be yourself, have fun, bring customers along for the ride with you.

I appreciate some will say they know nothing about social media, that they don’t know what to say. Social media engagement is a basic business task. Anyone can do it. You start by starting. Getting someone else to do it for you is a dreadful mistake, it will likely achieve little for your business.

Remember, have fun. This is key. People go to social media to be entertained. Entertain them. Let them see that you have a sense of humour.

One other point: avoid using an AI tool to write posts for you. AI content is, well, AI content. Oh, and don’t use AI generated images as doing so will say more about your business, which you ay not like.

If you or a retailer you know are finding economic conditions tough for your business you can complain, do nothing or make changes. Only one of these has any hope of improving the situation. My advice is to pursue change every time.

Here are 13 free and easy to implement action items any local small business retailer could consider to improve their situation.

• Engage everyone in the shop. Let all team members know how the business is going, what it needs and why. Agree on achievable goals and steps to take in pursuing them. Track results openly. Keep communicating.
• Declutter. If business is down and it’s getting to you, spend a day or two decluttering. Typically, the act of decluttering helps you see positive moves you can make in the business. Do this yourself. Make those moves.
• Quit dead stock. What is dead will depend on your type of shop. For some, it will be stock that has not sold in 6 months while for others it will be stock that has not sold for 2 years. Dead stock wastes space, time and ties up cash. Anything you get for it is better than the daily cost of your dead stock today. And, in quitting, do it in 2 weeks. If it’s not gone, give it away.
• Reward an additional purchase. Include a coupon on receipts that offers a reward if the customer makes another purchase in a short period of time – we suggest 7 days. While loyalty points programs focus on the longer-term relationship, the voucher proposed here is all about encouraging purchases sooner. In our software, this is discount vouchers.
• Know what you are missing out on. In a typical shop, the top 5% selling items are out of stock 21% of the time. That is guaranteed revenue missed. Fix it and revenue will increase. Your POS software can easily show what you’re missing. In our software tis is on the Insights Dashboard.
• Support a local community group in return for their members supporting you. Connect with a group that has plenty of members, the community loves and that does good work. Offer their members a discount off purchases and a contribution donation from each purchase value to the group. The goal is to get their members who don’t buy from you buying from you = new customers.
• Have fun on social media. People go to social media to be entertained. Entertain them. Don’t overthink it. Have fun, show your business as a place of fun, share knowledge that differentiates your business.
• Leverage free. Make sure your Google Business and Bing (yes, it’s a thing!) presences are up to date and fun.
• Lower payments costs. Card payments can cost small business retailers between .075% and close to 2%. While you can surcharge customers, switching payments company could save plenty. If you switch, still surcharge tho.
• Email your customers. If you have customer email addresses and know what they have bought, run some targeted email campaigns using this data.
• Review pricing. Most retailers either follow the supplier suggested retail price or a mark-up percentage set many years ago. To determine the price you could sell an item for, ask that question. It could be that the convenience of your location and lack of easy to access competitors means you can sell items for more than is usual. If this is the case, do it. Most POS software makes it easy to make these price adjustments.
• Talk to your suppliers. If you are finding it tough it is likely your suppliers are too. Ask if they have deal prices to move inventory. If they do and it is inventory you can easily sell, grab it for bonus margin.
• Set your shop right. Make sure that your shop is guiding shoppers to spend, and spend more:
  • Inside the front door: Have a new display weekly. Bright. Optimistic. Fun. Unexpected.
  • At the counter: Pitch items people will easily purchase on impulse. Items that achieve the best performance and items they did not expect to see at your counter.
  • Have a scent: Incense, a candle – introduce a scent people like.
  • Have a sound: Play happy music people will know and sing along to.
  • If it is cold outside, make your shop warm.
  • If it is warm outside, make your shop cooler.
  • Move: Move at least one product category each week. This gives the shop a feeling of change.

My POS software company, Tower Systems, makes and supports POS software for local specialty retailers in Australia and New Zealand. I also own the newsXpress newsagency marketing group and own and runs shops.

I share practical advice like covered here because I love helping local independent retailers thrive.

Mark Fletcher
Managing Director
Tower Systems International (Aust) Pty Ltd
ABN 61 007 009 752
M | 0418 321 338 E | mark@towersystems.com.au
Sales: 1300 662 957 sales@towersystems.com.au

First published: June 27, 2024.

I see small business retailers pitching cash is king on social media and shake my head. It’s a waste of time. People will pay how they want to pay, if you let them.

Berating people, telling them that cash is better for you and the economy is an argument not backed by facts.

The cost of handling cash is not dissimilar to the cost of taking cashless payments. especially today with fewer bank branches available for cash deposits and making change.

We are retailers. Our businesses are service businesses. If someone wants to pay us money, we need to be flexible in the forms in which we receive this. And, if one form of payment is more expensive than another, consider a surcharge for that and explain to your customers why.

Posting on social media about the cost of card payments and bemoaning money banks make from this is not cutting through. You only have to look at the continued growth in card and other non-cash payments to see that. So why waste time and energy complaining about something that has no chance in going your way. Instead, spend time celebrating what you love about your business.

Of course, what you put on social media from and about your business is 100% up to you. The challenge for our channel is that anything one newsagent does can speak for more than that one business.

What we want in our business, our prime goal, is more shoppers. Anything that gets in the way of achieving this needs to be considered, and probably dropped. I think the social media posts bemoaning the cost of card payments and calling for people to pay cash are an example of a turn-off social media post. Such posts risk turning people off your business and off colleague businesses in the newsagency channel.

Yes, the payments arrangements in Australia are unnecessarily complex and they do have a cost to our businesses. But, shoppers are flocking to non-cash methods of payment and it is good for our businesses if we accept these with ease and grace.

Instead of waging an unwindable campaign about your preference for cash over card for payment, consider diverting that energy into business improving opportunities such as addressing common expensive management misses that I too often see in local small business retail. here are some ideas:

• Dead stock. A problem not seen is not a problem to too many. In the average indie retail business, dead stock is equal to at least 3% of turnover.
• Running out of stock. In one business I looked at recently, being out of stock cost the business $15,000 in sales in six months. ordering based on what their software advised would have solved that.
• Failing the price opportunity. Shoppers are less price conscious than we think they are. Have faith in your business. Price based on the value you offer and not based on fear of competitors.
• Bloated roster. I often see a bloat cost equal to around 10% of business labour cost.
• Wrong trading hours. Some stay open too long while others are not open long enough. Either way has a cost to the business.
• Being blind to theft. Theft in local indie retail retail costs on average between 3% and 5% of turnover. Not watching for it, tracking it and mitigating against it has a cost to the business.
• Ignorance. No, it’s not bliss. There are insights in software that can guide better decisions, faster decisions, more financially rewarding decisions. Yet, too many in retail don’t want to know.

This is a list of seven action items from which any small business retailer could benefit. Pick any or all of these ahead of spending time going on social media calling for people to pay by cash instead of a card and you will gain more benefit for bottom line.

It’s an easy complaint for a retailer to make – my EFTPOS merchant fees are too high, it’s not fair, time for me to consider another supplier or to consider charging customers a surcharge.

Customers hate surcharges, especially if there is another retailer selling what you sell who does not charge a surcharge.

Every method of payment has a cost, including cash. In my experience working with retailers, the cost of cash is higher because of theft. However, it is not easily seen, especially in retail businesses that do not research or teach theft.

To address the cost of EFTPOS merchant fees on a retail business, you need to be an engaged retailer. Here are some ideas:

• Promote cash payment – if you want the costs associated with cash of course.
• Be clear as to the cost of using a card. You could apply a surcharge, which I think is a ridiculous idea though.
• Price knowing that cards will be used by customers. Build the cost into your pricing model. Keep the bump under 1.5% and it is less likely to be noticed.
• Lower a cost elsewhere to cover the cost. Look at your labour cost, for example. Shaving a hour of employee rostered time can save you around $30.00, that’s equal to purchases of $3750.00 on a card – depending on the type of card used.
• Increase sales. While you should be single-mindedly focussed on this anyway, increasing sales helps you address the EFTPOS cost and more in the business.

It’s easy to complain  over EFTPOS fees. But … before you do that, look at your own behaviour. Here are common points in retail businesses that retailers overlook when they complain about a supplier or service related cost. These are things I regularly see ignored in favour of complaining about someone else:

• Dead stock. A problem not seen is not a problem to too many. In the average indie retail business, dead stock is equal to around 3% of turnover.
• Bloated roster. Some prefer to spend money on people so they have time to themselves for relaxing, golf or to sit in the back office, where no customer purchases from. I often see a bloat cost equal to around 10% of the roster.
• Wrong trading hours. Some stay open too long while others are not open long enough. Either way has a cost to the business.
• Being blind to theft. Theft in local indie retail retail costs on average between 3% and 5% of turnover. Not watching for it, tracking it and mitigating against it has a cost to the business.
• The wrong product mix. GP% is a key measure of retail business performance. Increasing yours beyond what is traditional for your channel provides you with a buffer. For example, transaction count / sales can decline and you can be okay. Measure GP%. Set a goal. Chase it. The air is cleaner in above average.
• Ignorance. No, it’s not bliss. There are insights in your software that can guide better decisions, faster decisions, more financially rewarding decisions. Yet, too many in retail don’t want to know. That failure costs them plenty.
• Stop running out of stock. Manual process for stock reordering, by retailers and suppliers, regularly result in sell-outs, and, therefore, missed sales. Every time that happens it is a cost to the business. In a retail business I looked at recently, the cost of sell-outs was more than $3,000 in a year, or $1,500 in gross profit, all because of poor re-ordering management.

The items on the above list are all on the retailer to address. The benefit is that addressing these results ins a stronger, leaver and more valuable retail business.

Adding a surcharge is an easy step, but the wrong step in my view as doing that could shield you from more important and valuable business moves you can make.

If you have noticed a change in shopper behaviour because of interest rate / inflation / wage suppression challenges, one option that could help is discount vouchers a facility in the Tower newsagency software.

Discount vouchers offer a way for you to add value for customers while encouraging spending with you rather than elsewhere.

Being dollar based, the value of the reward you provide is more easily understood than points.

I have seen retail situations where shoppers are concerned about money and have embraced discount vouchers because they offer a reward in currency rather than grey points. Garden centres and pet shops are retail channels where there is years of success for the vouchers.

In my own newsagencies I swear by them. Good redemption rate. Better value per shopper visit. The vouchers easily pay for themselves from increased sales.

I made a video about this a year ago in which I show the vouchers and explain their use.

With news outlets being drawn to negative stories about consumer sentiment it’s appropriate to have a structured course of action in-stopre that plays against that narrative being pushed.

The vouchers are a small business differentiator as the supermarkets and other big businesses cannot match them.

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

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

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

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

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

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

Keep

It

Simple.

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

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

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

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

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

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

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

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

What happened to Optus, Medibank and Harcourt in recent weeks could happen to any business. Cyber attacks are on the rise, because data has a value. Understanding the value of data is the key to investment in its security.

My Tower Systems POS software company prepared and published advice to its 3,000+ customer community. I share this advice here as it could be useful to any retailer or business owner.

There are things you can do in your business to better protect it from attack. We put together this advice for our POS software customers and share it here with you. Here is our advice:

Security is important for any business and it is important that you protect your business as best you can while still allowing the business to operate efficiently. This is not just for the security of you business and customer data but to provide protection against malicious attacks such as ransomware. 

Below we will list the things you can do to ensure your computers are as secure as possible.  However, some of these restrictions may not be for suitable for all businesses. You will need to decide what is your best approach while being aware of the risks associated.

Windows Usernames and Passwords

The easiest form of security you can enable is having each computer require a username and password to access it.  The passwords should be changed every couple of months.  A drawback of having usernames and passwords is that you need to ensure that all staff are aware of the passwords so that access is not hampered.

Windows Active Directory via AzureAD or Similar

An option for an additional layer of security (over and above standard windows usernames and passwords) is to implement a domain network where staff logging in are authenticated by a Windows Active Directory service.  This option has a not-insignificant cost associated with it. It also means that you will need to allocate staff individual accounts and they would need to use these to access your system.  Implementation of this may also have setup ramifications for your POS software. 

Remote Desktop

If you are not using Windows Remote Desktop (RDP) this it is highly recommended that you disable this service in Windows.  If you are using this service then ensure you have a very strong password that is updated regularly. The preferred option for RDP is to use this via a VPN however if this is not possible access should be limited to specific IP addresses.   Additionally, when this is used in conjunction with an active directory service, like the one mentioned above, this adds an additional layer of security.

Backups

Our recommendation is to use a cloud backup service that incrementally backs up your entire PC.  Consider adding a cloud backup service to any computer that stores any valuable data, not just your server.  It is imperative that the service you use has both a local and a cloud copy for easy disaster recovery.

Browser Passwords

While saved browser passwords are very helpful, it does open a risk should your PC be compromised.  Our suggestion is to not save passwords, especially for accessing any service that stores sensitive data, like bank login etc.  Consider using a password manager such as LastPass or 1password to help you remember passwords.

Emails

Once of the biggest security risks in your business is email.  Only open attachments and click on links in emails that you are sure are from known senders.  Check email addresses as well as the sender’s name. If it sounds suspicious, it probably is.

People Remote Connecting to your Computer/Network

Be careful about who you let take remote control of your computer, ensure they are from who they say they are.  If you are suspicious, terminate the call and call the representative back on a publicly available number.

Don’t use out-of-date Software, Hardware or Operating Systems.

Keep your systems up to date by ensuring you are running versions of software, operating systems and hardware that are still supported by their manufacturers. Make sure that any updates to software, especially Windows security updates, are loaded as soon as possible.  This will ensure that you are not susceptible to any vulnerabilities have been patched by the supplier. 

I released this video, 4 things any retailer can do to improve cash flow, on my POS software company’s YouTube channel less than 2 days ago and it’s had 243 views already. This is a surprise because the videos I make tend to attract time number of viewers over several months. They are not made to attract good numbers quickly.

I am sharing the video here because of the high number of views (for this type of video) and the feedback from retailers about the advice provided.

I made the video after publishing a longer list of advice for retailers on improving cash flow:

1. Free dead stock. In our experiences this releases the most cash flow value, but it is the option most often rejected for often silly reasons. dead stock is stock that is not selling, not moving. It is often stock you have long since paid for. This means that any money you get for it is positive cash flow right now. The loss from paying for the stock has already been realised – many retailers forget that. So, idea tidy what’s not selling, and quit it creatively, with urgency. Cheer every dollar this brings.
2. Trim where you can without impacting sales. The most beneficial move here is typically a cut in the roster, a cut in labour cost. Save a few dollars with no sales revenue impact and you are ahead cash flow wise.
3. Get shoppers to spend more in a visit. Smart loyalty software will do this. Points loyalty systems are unlikely to do this. There are better loyalty options designed to help encourage shoppers to spend more in a visit. Our POS software helps nurture this.
4. Charge more. Yes, we understand this can be scary. The thing is, if you do this carefully, thoughtfully, and offer a good loyalty incentive and bundle items together, a modest price rise is less likely to be noticed and more likely to have a positive impact on cash flow. Think about it. Plan for it. Take small steps. A 1% rise across your top 200 inventory items could be the small step that delivers the cash flow boost you need.
5. Find more customers. The more new customers you have shopping with you the more you will sell, obviously. It can feel easier said than done to attract new customers. In our experience, most local retail businesses do not have a new customer attraction plan. Do you? It does not need to be complex. Even a simple social media pitch honouring a new product, reflecting your gratefulness to have it could be enough. One the post is up, pay for a boost in your area. An $8 spend over 4 days is all you may need to get in front of a few hundred prospective new customers … and that gets you on the path, that could be your new customer attraction plan.
6. Trim overheads. Look through your business overheads and look for an opportunity to trim.
7. Look at your sales counter. With most purchases being completed at the sales counter, look at it from the perspective of your shoppers and see what you could do to encourage them to add items at the last minute. The counter is a valuable place of influence. Use it. Make sure it is driving deeper purchase baskets, and adding to cash flow.
8. Spend less on inventory. Look for suppliers with good inventory holdings that allow you to use them, rather than your shop floor or store room, to hold stock you may not sell right away.

My concern is that too many retailers will not do the work, they will not take the important steps to address cash flow, until it is too late.

Through the work I do at Tower Systems and at newsXpress, I try and encourage retailers to confront the truth in their business data sooner and with tighter focus that might otherwise be the case.