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Newsagency management

Retail advice: shopfit changes worth doing are worth doing well – replacing the shop floor covering

We decided to replace the worn-out carpet in the retail newsagency business that we purchased on Glenferrie Road, Malvern, Victoria, in December 2021.

The decision is part our small-steps approach to refreshing this business. Rather than undertaking a whole shopfit at once, we are making a series of changes over time, as we learn more abut the business and its customers, and, to suit our goal of creating a less traditional newsagency.

So, we decided to replace the carpet.

We got several quotes, and chose a company with a good reputation. we appreciated their honesty regarding the need to close for 2 days to do the whole shop, around 250 sq metres.

The challenges started part way through day 1, when the old carpet was being removed. It turned out that under the old carpet was underlay, more carpet, tiles, and, lino tiles. The business had not changed hands in 38 years and it appeared that the original flooring was still in place for plenty of the shop.

In some places there were not as many layers on top of the original concrete floor.

The carpet installers had not anticipated dealing with so many layers when accepting the removal job from the carpet company. We had to get to the shop to take a look for ourselves as they were asking for more money.

The quote we had agreed to was not, in hindsight, as clear as it could have been. They could have removed the carpet and underlay and laid our new carpet on top. But, that would have resulted in an uneven floor. For the best result, all previous flooring had to be removed, and that would cost, we were told, $2,500.00 more.

A complication was the look of one layer. To be sure, it needed to be treated like asbestos. It was either that or halt the works and have it tested, which was not an option given where the project was at.

So, we agreed to the $2,500 and the removal back to the original concrete was done.

From the Saturday through to the Monday, March 14, the project was completed and new, lush, underlay installed and new carpet on top of that. The result is wonderful, clean, soft, and, quiet, it is very quiet.

From when we re-opened Tuesday morning we have been receiving comments from customers. They agree with us, it’s soft to walk on, and, it’s quiet.

While the project cost more than expected, the end result is well worth it. Along the way we have been reminded some things about shopfit works:

  • Be sure of the outcome you want.
  • Be thorough in your research, so you know the complete scope of the project.
  • Be clear what you want done in the project when seeking quotes.
  • Have a contingency in your budget so you can cope with surprises.
  • Health, safety and comfort of those working in the business and those shopping in the business has to be your top priority.
  • When it comes to flooring, if the shop is old, expect past changes to have been placed on top of old flooring, as it is cheaper.
  • The best flooring outcome starts with new flooring being placed on the base concrete or timber flooring in the building, and not on top of existing floor coverings.

Point 1 is always our position going into anything. it’s why we quickly agreed to the additional payment – we wanted then best outcome.

In terms of health, safety and comfort, we chose a more expensive underlay and this has been key to the customer comments over the last week since installation. The feel underfoot is wonderful.

While we want our shoppers to talk in good terms about what they buy in our shops, them talking in good terms about the experience is equally valuable, especially in a suburban high street situation like our Malvern shop. This is why we invest in shopfit upgrades and changes.

Every week we are making changes in this shop, introducing new product lines, moving fixtures, editing existing ranges and more. But, we are doing this in a small-steps approach – in part so as to not disrupt long-term customers who appreciate certainty (a thriving shop 2 doors away has had the same family owners since the 1930s) and to allow us to adjust as we learn.

On our current trajectory, we think it will be early 2023 before we have the shop feeling how we want it. Completing it before then could see us make changes too soon, and there is no win in that.

Also, our small-steps approach has us in control whereas a more traditional new shopfit approach would see the shoplifter in control and that’s not what we want as retailers.

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Management tip

Insights from The Retail Summit in Dubai

I am grateful to have been able to attend The Retail Summit in Dubai earlier this week. Here is a video I shot yesterday in which I care some insights from the conference:

While it was terrific to be in a live conference setting again, the travel process was more complex and less enjoyable than it was priorate the pandemic, as you might expect.

I also got to see some innovative retail in the latest mall situation in Dubai. It was all corporate, big business type. But, nevertheless, worth seeing.

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Newsagency management

Closing to re-carpet the newsagency

The new shop we took over in Malvern Victoria needs re-carpeting. We did some investigation under the existing carpet and sought professional advice. Given the age of the building, the multiple layers of flooring underneath, including some challenges, we decided to close from Friday through to and including Monday.

This closure allows the whole shop to be done properly and safely for all. Safety is the key here, given what is under the floor.

We have been letting customers know in-store an online. here’s the note we have provided:

News from newsXpress Malvern.

We are closed from 5pm Friday March 11 until 7am Tuesday March 15 so that we can replace the carpet in the shop with new carpet. This is a big job and the safest way to do it for our customers, employees and tradies is to close.

We apologise if this inconveniences you, but, safety is important.

Since we bought this business 12 weeks ago, we have made some changes. You might have noticed the new card wall and the new range of cards. New carpet is the next step.

We are also adjusting where we place the newspapers so we can introduce some gifts we think our customers will like.

Our commitment is to offer you the best range of magazines you’ll find in Melbourne, a wonderful range of cards, gifts you’ll love to give and stationery for home, and work.

Thank you for shopping with us, and sorry about being closed for 3 days.

Take care …

Guy and your newsXpress Malvern team.

This shop was in the same family for close to 40 years. We are being careful to not make big changes all at once. Last week it was the card wall and range of cards – all new. This weekend, it is the floor. Next, it is walls and the counter area. In a few months we will start to tackle the main shop floor fixtures.

Before we started any of these changes, we edited what was there, removing ice creams, drinks and everyday confectionery, while at the same time expanding the stationery offering. All of this done based on data.

We have a tight budget. Our approach is frugal, because we know every dollar spent has to be recovered.

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Newsagency management

Why are your EFTPOS merchant fees rising?

It’s an easy complaint to make – my merchant fees are going up, it’s not fair, time for me to consider another supplier.

Okay, yeah, that’s an easy take. It’s a cheap shot by me to call it out. But, let me explain and explore it with you.

My advice is to look at your data first.

I’ve looked at hundreds of thousands of baskets from many retail businesses.

The most common reason merchant fees are increasing is because of more sales transacted using EFTPOS.

While sometimes the actual fee basis, flat fee per Tx or percentage, increases, this is rare.

Yes, the most common reason a retailer paid more in merchant fees last month than the month before is because more transactions were paid for on a card.

So, the EFTPOS provider is not the cause of the issue.

Newsagents in some marketing groups have access to preferential rates that see them paying the lowest fees in the country.

But, that addresses only the base cost.

To address the growing cost to the business, of people using a card to pay, 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. Build the cost into your pricing model. Keep the bump under 2% 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 kick a bank 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 kick a supplier:

  • Dead stock. It’s easy to identity but often not. A problem not seen is not a problem to some. In my experience on conducting an audit of stock performance, usually, 20% of stock on the shop floor over which the retailer has full control underperforms and should not be there.
  • 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.
  • 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 retail, like a local newsagency business, 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. It’s not bliss. It’s not! 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.

The 6 items on the above list are all on the retailer to address.

I get that it’s easy to complain about high EFTPOS fees. If you are contemplating that, please take a moment to look back inside your business, look at the reason why and see if there are decisions you could make that are more valuable than complaining about EFTPOS fees or changing supplier. I’d be happy to help.

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Newsagency challenges

Leveraging the loyalty differentiator in the newsagency

Shopper loyalty has become a maze of hoops, often with little real value at the end for shoppers, and retailers. Almost 9 years ago to the day my newsagency software company launched a new approach to loyalty. Yesterday, I shot this short video in which I talk about what continues to be a differentiating approach to loyalty. I know of hundreds of newsagents using this, and hundreds of other retailers.

Sure the video promotes my software company. It also encourages you to look at what you do in the loyalty space and to question whether what you do values shoppers and differentiate your business.

This simple approach to loyalty is easily understood and this helps people engage with it sooner, even those who make a one time only visit to the shop.

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Leadership

Retail advice: you are not your customer

Talking with a newsagent the other day they mentioned their success with a product category they had rejected for several years. That category is now delivering close to $50,000 a year in good margin revenue to the business. Better still, it is attracting a category of shopper not common to their business.

They mentioned it because they heard me say to another retailer you are not your customer.

None of us in retail are our customers yet too often local small business retailers stock their shops with what they like, missing opportunities to give more local shoppers what they like.

Ranging new products is speculative, a risk. But, trying to attract new customers requires this type of risk taking, done carefully.

The key is the data analysis of the performance of what you have taken on, to measure whether it stays or goes. If it is working, the opportunity could be to expand into allied niche areas, to grow the opportunity further.

Accepting that you don’t know what you don’t know can free you to trial products you have rejected in the past and, through that, uncover valuable opportunities for your business.

My advice is to always have a modest inventory and space investment on the shop floor of new products that you would not usually carry. Let them show you if they work or not.

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Management tip

NZ Autumn gift fair postponed

This is another gift fair that some Australian retailers and suppliers usually attended.

Announcing NEW DATES for Autumn Gift Fair 2022!
22 – 24 May 2022 | Auckland Showgrounds
While we ended 2021 optimistic that Autumn Gift Fair would run safely and successfully in March, it has become clear that with the New Zealand government’s decision to move the country to the level Red due to the emergence of Omicron in the community, we will not be able to proceed with the show dates of 6-8 March 2022.

The new May dates provide a measured gap for the event to proceed and land closely to those in which we ran a highly successful rescheduled Autumn Gift in 2021 – where many retailers secured early orders to mitigate international supply disruptions.

We thank our community once again for all of your encouragement and support during this challenging time and trust we will see you in Auckland in May.

Kia kaha from the New Zealand Gift & Homeware team

I was planning on going again this year. It’s a terrific trade show to attend to find new products and new approaches to gift retailing.

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Newsagency management

What a difference a supplier makes to gift packaging revenue in the newsagency

A suburban newsagency business sold $2,953.88 worth of gift packaging in 2019. In 2021, that same business sold $8,449.89 worth of gift packaging.

Revenue for the business is up, overall, by 59% in 2021 versus 2019. The gift packaging growth is 286%.

The stock weight / investment / space allocation is unchanged. The only change is the supplier.

What a result.

Retailers can’t bank promises or a supplier rep or merchandiser friendship. We can only bank over the counter results. This result is excellent for the business, and for the supplier to the business.

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Newsagency management

Newsagents discuss Omicron related challenges

It was terrific to host a meeting on Zoom Wednesday (live and recorded for those unable to join on camera or on audio by phone) in which we caught us with how Omicron was impacting the safe and effective management of newsagency businesses around the counter.

We talked for an hour, comparing notes, sharing ideas and offering encouragement.

The meeting brought together newsXpress members from around the country in a broad range of retail settings. The diversity of situations is helpful in developing a good understanding, because Omicron is playing out differently in different parts of Australia.

Beyond the challenges of navigating opening hour variations because of limited staff availability, there was good discussion about products that work in this situation and more.

Zoom continues to be a useful tool for connecting newsXpress who might otherwise not have been able to so easily connect – sharing experiences, ideas and opportunities.

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Newsagency management

6 local retailer resolutions for a more enjoyable 2022

  • Touch data less. Every time you touch data, entering an invoice, entering accounting data, it’s an opportunity for mistake or, worse, fraud. 
  • Manage stock in one place. If you sell online and in a physical shop, manage your stock in one place. Double handling is fraught, and it wastes time.
  • Add a revenue stream. Seek out new products or services. Broaden the appeal of your business. Broader appeal = stronger foundations.
  • Leverage you. It’s likely your knowledge and passion are a key difference for your business. Share it. Your competitors can’t compete with you.
  • Copy less. Big retailers advertise loyalty programs to trick shoppers to think points are a reward. Be different, run an honest loyalty program.
  • Be authentically local. When you buy local, talk about it, celebrate it and, show shoppers with the local message on products tags and more.
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Newsagency management

How to do a magazine relay in your newsagency

I first shared advice on how to relay magazines to drive growth in sales back in 2006. Over the years I have shared updated advice here.

While magazines are not as important as they were, and some newsagents don’t have the category at all, I revisited the advice. I share the revised advice below. This is one of 200+ articles on the newsXpress member knowledge base.

In editing the advice, I did a relay two weeks ago in the business I just bought, which does close to $300,000 a year in magazine sales. I read the earlier advice, did the relay and edited the advice. I mention this to make the point that I am writing from current experience. The relay in this business was the first step. next, coming soon, is a trimming of space taken by magazines, to reduce their occupancy cost and thereby improve their profitability. But, the relay had to be the first step.

How to do a magazine relay in your newsagency

A magazine relay is the process of recasting, improving, the layout of magazines in your business, with the main goal of increasing sales and a secondary goal of improving retail space efficiency.

Typically, a relay of 1,000 magazine pockets can be completed in 4 hours. This time investment can add 5% and more to sales. (I did this recently (December 2021) in a shop that had never had a magazine relay.)

In an older version of this advice we advised what to place where. That is not what we consider best practice today. No, today’s approach is more organic, more what you want for your business.

Think of it as starting with a blank canvas and no plan as to what the final art will look like.

DO IT YOURSELF, DO IT ALONE.

A magazine relay is a statement about the business, a marketing and management activity. It sets the tone and says this is who we are, what we do and what we stand for. Doing it yourself is a leadershipstatement. Doing it alone means less conflict, less noise. And remember, the relay is not a destination … because regular change in magazine layout is essential.

PLACEMENT.

Magazines are best located on a wall of the shop, and not in a centre fixture taking up premium retail space best allocated to higher margin and business differentiating products.

VISUAL NOISE.

Magazine covers are colourful. Adding more noise, such as product headers, can detract from the products. Consider a less is more approach, allowing the products to speak for themselves.

FULL FACING OR NOT.

Full facing is a term used in 2 ways: where 100% of the cover of a magazine is shown (true full facing) and where you have 1 magazine title per pocket in a tiered magazine fixture.

If you have the space on a wall and have less than 500 magazine titles, true full facing, showing 100% of the cover, can deliver best results.

In tiered fixtures, while full facing, one title per pocket works best, fitting 2 or 3 titles in a pocket can work with low volume special interest titles people will seek out.

BEACON BRANDING.

This is the process of using magazine mastheads to draw attention to a category of magazines. Use the top 2 or 3 pockets for a single title, allowing it to draw attention.

OWN THE RELAY.

There is no right or wrong. In our experience doing relays in. many different situations, the best approach to a relay is to start … just start. You will soon find your groove and see decisions you can make.

DOING THE RELAY.

Start at one end of a fixture. Take off all the titles for between 3 and 6 columns and rebuild, with purpose, to draw attention, tell a story and drive sales.

As you build up a column, take off magazines from another 1 – 3 columns, always keeping empty space between where you are working and the old layout.

Look ahead, read the categories on display and think about where you are at compared to where you are headed.

ADJACENCIES.

This is a bit of secret sauce. It is where you can make editorial decisions, business decisions to guide your shoppers. What works best with what. You don’t know, not for sure at least, how can you. Ok, there is basket data you could read … but that only tells you what is happening. What about what could happen? Who knows. Experiment!

For example, should you put model plane magazines next to flying magazines? Or, should model plane magazines be in a distinct section of all model titles?

Do puzzle shoppers shop by brand or puzzle type. Publishers want you to layout based on their brand whereas your shoppers are, in our opinion, more likely to shop by interest. For example, all sudoku titles could work better together, or all large print titles could work better together.

ADJACENCY SUGGESTIONS.

Here are some adjacency suggestions. They are not rules. They are shared here to help you think of your own.

  • Cricket, golf and swimming go well together. Wrestling, boxing and buff-type fitness go well together.
  • Soccer is not rugby or AFL. Don’t mix them together.
  • Classic car titles need to be distinctly separated from regular car titles.
  • Classic car titles work well with classic trucks.
  • Car lovers do shop by brand. Place branded magazine titles together.
  • People interested in home renovation could be interested in any renovation title.
  • Creative arts go well together: painting, writing, craft.

EASE OF SHOPPING.

If you have a tall fixture, think of your customers. There is no point placing titles targeting older shoppers up high or down low as reaching or bending could be challenging for them.

WORKING THE RELAY.

Work your way down the fixtures, creating the placement and adjacencies that you want.

Ideally, get it done in one session.

So people know you are focussed, put headphones on. Ignore everyone asking you questions.

Get it done.

HAND OVER.

Once you are done, walk the new layout with others working in the shop. Explain your decisions. Given them a response for customer comments. Make sure that everyone in the business is on your page.

WATCH AND MEASURE.

Next, watch shoppers and listen for feedback and, after a couple of weeks, look at the sales results. The results could guide adjustments, or not.

BE READY TO DO IT AGAIN.

If you have more than 300 magazine titles in your shop, a relay at least every year is a good investment … because magazine shoppers are usually loyal and that loyalty can benefit other, higher margin, parts of your business.

If you have made it this far, thanks for reading.  Magazines really are a point of difference which we need to work harder at embracing – despite the challenges of the distribution system.

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magazines

The high cost of buy now pay later for purchasing lottery tickets

Afterpay and Humm have cards that look like credit cards through EFTPOS terminals. They can be added to a digital wallet for watch and phone tap. It’s only when the retailer discovered the 3.5% and more cost per transaction that they realise the higher cost product has been used.

I’ll leave the social responsibility question of using buy now pay later for lottery ticket purchases for another time.

Since the EFTPOS terminal providers don’t know what’s in the basket they cannot block the transaction. They could. The tech is there to feed this to them. Now, by basket, I mean each transaction – the EFTPOS terminal and the network to which they connect do not know what is in each transaction.

The only real option right now for retailers is to ask each customer about the method of payment. But this will slow transactions at the counter and, likely, lead to shopper frustration and, maybe, embarrassment.

I have discussed the issue with a range of stakeholders and they are engaged with it. It is too early to say if that engagement will lead to change that satisfies retailers – I say this because one outcome could be the removal of BNPL from the channel altogether and I wonder if impacted newsagents would want that.

Retailers accept EFTPOS payments through a connected terminal in good faith. They have an expectation of a reasonable soft of that method of payment. The gap between .75% and 3.5% is too much, too great, especially for items over which the retailer has no control of the selling price.

I have looked at the basket solution as this is what has been established listed for the Indue card here in Australia where people with the card are permitted to spend it in a designated group of items. The tech. block them using the card on non approved product categories.

Some companies manage use of their finance services by not permitting certain retailers in a whole of business approach. The basket approach is better. But, in this instance with lottery products, the cost of implementation in tech. and at the counter in dialogue with shoppers could be problematic.

This is a complex matter that needs discussion.

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Lotteries

Is the Amazon Hub parcel pickup service a good fit for your newsagency?

Only you can answer this question for your business.

The core question, though, is: are you a retailer or an agent? An agent will want the transactional clip and therefore find the Amazon opportunity interesting. A retailer will wonder about the real commercial value of Amazon parcel collectors.

I have no interest in offering any form of parcel collection in any retail businesses. As a retailer, I see little value in any agency activity.

Parcel collectors rarely purchase anything else – no matter how thoughtfully you configure your shop to interrupt their path.

Parcel collectors bring to their parcel collection any feelings they have for the retailer source of the parcel, and this can be problematic.

Parcel collectors trend to be engaged … meaning they could rate you down for something outside your control.

Parcel collectors want speed. Often, they think they should be served ahead of others.

Sure there are some in our channel talking up parcel collection. Maybe find out the commercial relationships they have or their employer has with such services to understand their excitement. Buyer beware.

Newsagents I have spoken with recently who have offered parcel collection services have recommended against it.

If you think parcel collection could be for you, do your homework and ensure that providing such a service fits with your business plan and how you see your business into the future.

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Newsagency management

Follow the cash in your newsagency

From the moment a customer hands over cash, it should be tracked in the business. Each point of a gap in tracking is a point of possible theft.

This is on my mind today because a retailer colleague recently discovered an employee theft situation where the employee was able to steal undetected for many months because the business did not reconcile daily takings using their POS software. It was a manual process that was not regularly checked again st actual sales and even then, the checking was cursory.

More fool on the retailer for disinterest in managing cash.

The theft would have been stopped or at least seen sooner had they done their end of shift inside the POS software with that data feeding seamlessly and untouched by human hands through to Xero, the accounting software they use. Instead, they recorded cash manually and manually entered data into Xero.

This is a failure of process that was easily exploited by the thief.

Business systems exist to block this.

The more control a business owner exerts on their business by fully using their software and supporting this with black and white processes the less opportunity for employee theft.

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Newsagency management

Strong November retail sales in small business newsagencies

I am grateful to the 56 newsagents who quickly shared their November 2021 vs. November 2019 sales results so I could compare and see how the channel appears to be faring this year. the dataset is a mix of businesses, city and country, in marketing groups and not. All bar two were not in major capital city shopping centres.

I compared 2021 with 2019 so as to check-in with pre-Covid trading and now, with relatively open retail settings.

After comparing data from all 56 businesses here are the averages for business performance measurement points and categories, comparing 2021 with 2019:

  • Revenue: Up 27%.
  • Sales count: Down 6%.
  • Basket value: Up 43%.
  • Items per basket: Up 10%.
  • Average item value: Up 38%.
  • Greeting card revenue: Up 24%.
  • Magazines unit sales: Down 15%.
  • Toy revenue: Up 45%.
  • Gift revenue: Up 30%.
  • Stationery revenue: Up 9%.

There are other categories but I’m not reporting them here as the dataset is small. For example, jewellery. I have data for five businesses and the growth is excellent, but the numbers are too small. Similar niche categories are: jigsaws,  calendars, baby, homewares and garden … all delivering excellent results.

Several businesses reported no revenue growth and several others with extraordinary growth.

It is in the average item value and items per basket where we see the value for a business in that the value compounds. Now, if you can get more shoppers returning, that compounds further.

Of particular interest is the ratio of gift revenue to cards. The goal here now is $3 to $1. Some were at $.5 to $1 and others at $10 to $1. The gap in performance is considerable. Any newsagency business can sustain excellent gift revenue. I have seen this in small towns of around 1,000 people in the area through to capital city businesses. When it comes to gift revenue, population size is not the mot important factor, your range choices and in-store engagement are.

Overall, this benchmark is showing excellent results – good growth not only in revenue but good growth in overall business GP%. This is vital as selling higher GP% items sets the business to be able to sustain a revenue decline without profit decline.

The newsagency channel is healthy. The average newsagency is reporting a revenue surge and a GP surge. Newsagents have every right to be happy. Well done to everyone involved.

…

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

Footnote: I usually do newsagency sales benchmark studies comparing 3 and 6 month periods. 1 month is too small to call a tree on. However, it does provide an insight that can be useful not only in terms of performance but also in terms of transition, and that is evident in the data from this benchmark. More newsagents are evolving outside the lanes traditional to newsagency businesses.

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Newsagency benchmark

Having an A team and a B team is still necessary in retail in this Covid impacted world

Last year, a few months into Covid, plenty of retailers that could open set their roster so that the business could function of Covid impacted their workforce. They’d have an A team and a B team, and, sometimes, a C team.

I know of some newsagents continuing with this approach today, which makes sense given how much infection continues to spread in the community. In my own businesses we have them structured to minimise interruption should an infection hit the workplace.

The arrival of Omicron in Australia and news of the ease with which it spreads is a reminder, I think, of the importance on business owners to determine settings that appropriately serve the health and safety of all who work and shop in the business – regardless of state or territory government regulations.

I am fortunate to have spent the weekend in Sydney. It was interesting seeing retail outside of my home state Victoria. In big businesses the approach to protection pot employees and shoppers was more consistent than in small business.

In small businesses while check-in was monitored as was vaccine status, there was little checking of shopper distance and in most situations, no acrylics at the counter separating shoppers from employees.

For what it’s worth, I think all retail situations in Australia right now should have acrylic panels between shoppers and employees, along with easy access to hand sanitiser, free good quality masks for all employees and rest / cleaning breaks.

We keep hearing that there is no stopping Covid spreading. A business that is a point of infection does have to close, and be cleaned. Any step we can talk to reduce the opportunity for this the better in my view.

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marketing tip

The retail award is not enough to attract good candidates to retail jobs

$26.00 an hour is proving to be insufficient to attract good candidates to basic retail assistant roles in Melbourne and Sydney.

This is my recent experience and the experience of several retailers I have spoken with in both marketplaces.

I know of one retailer who advertised at $30.00 an hour just to attract good candidates. Another offered a $10.00 a day meal allowance, while another offered a travel reimbursement of $100.00 a week even for local applicants. I know of another retailer looking for a junior full time, a role they have easily filled in the past, who has not given upon on that plan.

In my own case we are hiring for three shops and while we are attracting candidates, most are looking for their start in retail and still expect to be paid at Level 4 or Level 5. One good candidate took a role in logistics as they will make 50% more there since pay rates have grown along with the spike in what is being shipped.

In plenty of areas of need pay rates are growing fast. Other benefits are being offered, too, to attract employees. Awards are needed, but they are a baseline, a minimum, and in the city they are proving to not be enough.

Considering all this and stories in the news, it seems we are in for up to a year of challenges in finding staff, which makes holding on to existing staff very important.

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Newsagency management

Small business retail advice: the logistics bottleneck, Christmas orders and having stock through January.

In this post I share advice provided to newsXpress members a week ago about logistics challenges and what steps to take not to ensure supply.

The situation.

There is no one single cause to the delays. Most imported products are arriving late. Import facilities are overwhelmed. Import distribution centres are overwhelmed. This is a significant pressure point and a place where packages do go missing. What used to be a two-day turnaround can be anything from five-days to four-weeks here.

From these centres, parcels are trucked to state based distribution centres. This is the second most significant pressure point, and another place where parcels go missing. The turnaround at this point has gone from two-days to, often, ten-days.

Once a parcel leaves a state based DC, it is on board for delivery. Now, depending on the courier company, this is where it can get interesting as on-board for delivery used to mean the parcel was on a truck and on its way to you, usually that day. In this current constipated situation, a parcel can be on-board for two weeks, sometimes more. It can switch trucks and even be warehoused somewhere while overloaded and overloaded trucks move parcels around. This is another pressure point.

Every time a parcel is touched puts it at risk. Today, parcel handling is up four and five times what it used to be. This is resulting in more mistakes, more losses. This dramatic increase in multiple handling is making the situation worse. It is another pressure point.

What confuses the understanding is when a parcel comes through quickly, like it used to a couple of years ago.

The situation is made even more complex with pallet shortages, more truck breakdowns as a result or working longer hours and support systems that are themselves overloaded with calls and emails – where’s my parcel?

What suppliers are doing.

Some suppliers are air-freighting stock in to get around the shipping bottleneck, which is worse than the trucking challenges noted above. Some suppliers have edited their 2022 plans, reducing range for fear that some seasonal inventory will not arrive on time. Some suppliers have brought forward their own orders to provide inventory certainty, which is further clogging inbound logistics.

Some are communicating well. Others are not.

Most suppliers do not run their own warehouse or logistics operation. They are reliant on third parties to do this, including reliant on their management decisions and communication, which is often left wanting.

Planning into 2022.

We expect the situation to remain as it is today until at least mid January: severely congested, slow, challenged, frustrating. That is what we are planning for at least. We don’t want it to run another two months. but, we think it is best to plan that this will be the case.

Monday this week we asked all preferred suppliers for an update from them on cut-off dates for Christmas orders as well as their view on supply through to January.

I don’t have time to edit every response for you here. Sorry.

The overall messages are:

  • Inventory levels are low for some suppliers, because of surge orders from businesses that have recently come out of lockdown.
  • Order ASAP for what you need six weeks from now.
  • Order by Friday this week for anything you want by the end of this year.
  • Order by the end of this month for anything you think you will need in January.
  • Fewer orders are better. If you used to do plenty of small orders. Try and reduce order quantity into bigger orders.
  • Some suppliers are closing for Christmas as early as from December 15.

So, right now, we think you need to have all your orders in for December, January, Valentines Day, Back to School, Back to Work and even into Easter so you have a plan for coming out of Valentine’s Day.

Do not put off acting.

Planning for the first few months of 2022 cannot be put off. If you do put it off, you will be disappointed and we will be unlikely able to help.

Footnote: On top of everything covered above, for states outside the main logistics hub areas of Melbourne, Sydney and Brisbane, add the usual distance delays multiplied by two or three. Sorry, but for you it will be worse than the worse it has been.

5 likes
Management tip

Updated advice for new newsagents

Six years ago I published advice for new newsagents covering a range of areas of newsagency management. Here is my revised advice for new newsagents:

There is plenty to learn for the new newsagent and plenty an old hand can forget. I am often asked about important day to day operational tasks in running a newsagency so I started putting together a list. It’s an evolving work in progress, something I am happy to share with anyone – not as a definitive list of what you need to be on top of in running your newsagency business but something at least you can check against.

But, before we get into the list, let’s consider the biggest challenge / opportunity. What type of newsagency do you want to run? A retail business or an agency. A retail business is value focussed – value from sales volume, product Martin and shopper visit efficiency. An agency is about making a clip from each transaction ‘owned’ by another party like newspapers, magazines, lotteries. A retail focussed business will be more valuable over the long term while the agency business can appear easier to run.

You drive business value by playing at the boundaries of the business, broadening what you sell, the price points you can achieve and the new faces you can attract. I think it is vital for new newsagents to invest time and capital in this – broadening the appeal, and value, of the business, as that is what will play best when it comes time to sell.

Now, to the updates list of every day work in a newsagency:

  1. MAGAZINES.
    1. Arrive invoices through XchangeIT – no other way.
    2. Only sell magazines by scanning. Never use department keys.
    3. Do not label all magazines. Do not label weeklies or high volume monthlies.
    4. When returning magazines, scan out returns. Do this at least weekly.
    5. Do not early return magazines the day they arrive unless you have been sent too many. Often newsagent who early return deny the opportunity of sales.
    6. Early return at least twice a month – based on what is NOT selling.
    7. If you have sub agents – only supply them through the sub agent facilities in your newsagency software.
    8. Check your magazine account as soon as it comes in to ensure you have received all credits.
    9. Pay your magazine bills on time without fail – avoid being cut off for weeks without magazines.
    10. You control where magazines are placed, it is your shop. Do not be told by publisher reps where magazines should go.
    11. You do not have to put posters in the window. I recommend against this.
    12. You do not have to do big magazine displays – it is your choice. I see no evidence of it increasing sales.
    13. I recommend against letting magazine companies set up display unless you think they will help drive sales.
  1. NEWSPAPERS.
    1. You control where newspapers are placed, it is your shop.
    2. If you are regularly undersupplied, complain to the publisher as well as the supplying newsagent (if you do not have a direct account).
    3. Scan all newspapers you sell.
    4. Scan all newspaper returns – accurate data will be your friend in the event of a dispute
    5. You do not have to put out newspaper posters or place newspapers in a certain position unless you have signed a contract with a publisher agreeing to this.
    6. Manage your exposure to promotions where you sell stock for a tiny margin.
  1. CARDS.
    1. Put out your own cards. Learn what you stock. Take ownership of this most important product category.
    2. Ideally, do your own card order. It’s your money being spent. Don’t leave this to someone else to do.
    3. Agree on an ordering process with your card co. account manager.
    4. Immediately report any over or under supply.
    5. Trust your data ahead of your gut and ahead of sell-in reports from suppliers.
    6. Pay on time or risk being cut off.
    7. Discount seasonal stock at the end of the season for a couple of days to pick up stragglers and make an extra few $$$.
  1. STAFF.
    1. Ensure everyone has a list of things to do each day.
    2. Have a documented position description against which your employees are measured.
    3. Have a written roster every week.
    4. Have a structured process for handling annual and sick leave.
    5. Use payroll software for record keeping.
    6. Pay always on time and preferably by electronic transfer.
    7. Pay super on time. Do not start someone working for you unless they have provided a super account number with their tax file number.
    8. Change your roster regularly for casuals.
  1. STOCK  AND SUPPLIERS.
    1. Only see supplier reps who have made an appointment.
    2. If a supplier rep tells you something will be a success, ask for the evidence.
    3. Use your computer system to guide ordering of stock – order based on sales.
    4. Order to a budget.
    5. Scan everything you sell.
    6. Scan out personal use stock.
    7. Set your own mark-up policy for items that are not pre priced.
    8. It is easier to discount than increase prices.
    9. Do not pay for an external stock taker – do it yourself through the year.
    10. Check high theft risk items like weekly or fortnightly.
    11. Arrive and price stock on the shop floor, and not the back room. You’ll sell more this way.
  1. SHOP LEASE.
    1. Pay on time otherwise you could be locked out.
    2. Do not agree to a new lease unless you have read the entire document and are prepared to agree to it in its entirety.
    3. Conduct discussions with your landlord in writing to maintain a paper trail.
  1. GST.
    1. Complete your BAS on time and make any necessary payment – to reduce the opportunity for you being audited.
  1. FINANCE AND OTHER MATTERS.
    1. If you borrowed to get into your business, start paying this off from the first week, make progress everyweek. This avoids you having a challenge when you come to sell the business.
    2. Pay yourself a wage or at least accrue this in the accounts.
    3. Integrate with accounting software like Xero – keep bookkeeper costs down.
    4. Ensure workcover (workers comp.) cover is up to date and maintained.
    5. Ensure you have appropriate council permits for what you sell – i.e. food.
    6. Have a structured banking process that ensures that cash is tracked at all steps and at all time.
    7. Take a data backup every day. The best approach is an automated cloud backup – ask your software company.
    8. Bank every day and bank the takings for each day separately to make reconciliation easier.
    9. Use your software to manage the end of shift process to drive consistency and accuracy.

As I said at the start, this list is evolving with time. I hope it is useful to new newsagents and would be newsagents, to understand some of the day to day tasks you cannot afford to get wrong.

21 likes
Newsagency challenges

Chasing value in the newsagency

Value matters in any retail business, and and retailers have more control over value than they often think they have.

Today, I want to address value in retail in the context of product value.

The value of a product depends on the gross profit for that product, what you sell it for less what you paid for it. The real value of a product is the gross profit less the labour, and retail space costs for the product. The value of a product over a year is these things times the quantity of the product sold.

If you sell a gift for $250 with a GP% of 50%, you make $125.00. That’s the same as the GP you would make from around 380 newspapers, 85 magazines or 100 or so lottery tickets.

The challenge is to have the right higher price point items that sell at good volume to deliver more bankable margin dollars than you will make from lower margin legacy products.

This is where an engaged marketing group like my newsXpress helps its members grow profit, and through this cultivate greater value for their businesses, and from that flows enjoyment.

Can anyone sell items worth $250 or more? In my experience, yes!

But, value is about more than the ticket price of an item. Other factors include:

  • Buy price.
  • Stock turn.
  • Shrinkage.
  • Differentiation.

Too often, retailers focus only on the buy price, thinking that buying better is what matters. It’s only part of it. You can’t bank a percentage. You can only bank gross profit dollars. hence, the importance of turn.

So, buying at the right price is important as is the right product that will turn quickly, ideally, faster than items it replaces on the shop floor – thereby driving more value from that allocated space in your shop.

I see plenty of retailers restricting what they can achieve in their business by deciding what won’t work, without even trying it. I’ll try just abut anything and let my customers tell me if it works or not. Now, of course, there are some constraints on that approach – space, capital and relevance to the overall business. But, I will certainly try products outside what is immediately assumed to be relevant.

That approach of trying things, in pursuit of growing value, has revealed plenty of opportunities I’d not have considered under the more traditional paradigm of retail. business management.

This is one of the benefits of Covid, we have permission to be more experimental in what we sell, how we sell, when we sell and where we sell. Embracing those opportunities, in pursuit of driving business value, will land rewards.

10 likes
Newsagency management

Click and collect remains popular after lockdown lifted

Click and collect continues to be popular in Sydney and Melbourne businesses after lockdowns in each city has been lifted.

From what I can see it is stronger in these two locations than elsewhere in Australia. Maybe that has something to do with the two recent long lockdowns. I’m not sure.

I mention it today to remind retailers that having an easily accessible click and collect solution for ordering and pickup is critical even post lockdown as it looks like it will be here for some time.

Click and collect can open your business to shoppers you don’t usually see in-store.

It can also make it easier for people to shop with you while you are closed.

Click and collect makes it easier for family living elsewhere purchase for loved-ones near the shop.

And, it can offer you management options for staff in-store depending on the volumes you can achieve.

Now, thinking about newsagency businesses, what are shoppers purchasing through click and collect? This list is a sample, but certainly not everything: Cards. Gifts. Magazines.Newspapers. Stationery. Toys. This is based on what I have seen over the last month.

Right now, of course, there is a higher indexing of Christmas gifts in click and collect – because of the lack of trust in Australia Post and others to deliver on time.

My advice? Make sure you ave a click and collect option, make it easy for customers and for the business.

1 likes
Newsagency management

How newsXpress uses data to help make newsagencies more successful, enjoyable and valuable

newsXpress provides its members a range of educational and motivational material. Here is a recent example, a video in which we explore extraordinary Halloween sales success in a business not known for Halloween.

Note: this video is not about Halloween. Rather, it is about how thoughtful, fact-driven decisions can add thousands on gross profit.

What makes the success more valuable is the bonus margin exclusive to newsXpress members.

Here is the video I and a colleague made over a week ago for newsXpress members about this.

In sharing this I am sharing information anyone could use. Yes, there is a risk to this. However, it is tiresome seeing marketing emails to newsagents promising the world but offering no facts, no evidence, no actionable items they can trial.

What is outlined in the video can work for Christmas and at other times of the year.

7 likes
Newsagency management

Halloween plush a massive success in the newsagency

Both in-store and online, we have been selling truckloads of Halloween plush. The Pokemon range has been a stellar success as has the entire Halloween Beanie Boo range.

In one store alone, $12,000 in four weeks. While Covid has played a role in this, social media engagement, online opportunities and tactical placement in-store have combined to really drive success.

Looking at stores specific data, the store is up 22% and the plush sales are up 100% – demonstrating the success of this category even ahead of excellent store growth.

I mention it this afternoon because a newsagent told me yesterday that plush was over as a category. I see no evidence of that in this data, nor in data from a bunch of stores experiencing similar results.

Data doesn’t lie. It feeds our success.

2 likes
Newsagency management
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