Every state and federal politician should are required to undertake a week of paid work in a local small business every year
Small Businesses Need More Attention from Politicians
Small businesses employ more Australians than any other business block, but they often receive less attention from politicians. This is partly due to the fact that small businesses are often fragmented and lack a unified voice.
One way to address this disconnect is to require every politician, federal and state, to spend a week a year working in a small business in their electorate. This would give them a firsthand experience of the challenges and opportunities facing small businesses.
The business should be chosen by random ballot to ensure that politicians do not choose businesses that are already aligned with their interests. The work should be paid so that politicians understand the value of the work and what it is like to live on a small business income.
I believe that this small business work experience program would help politicians to develop a more practical understanding of the economy and the challenges facing small businesses. It would also help them to connect with small business owners and their employees on a personal level.
I first shared this idea 10 years ago, in a post here, on this blog.
Small businesses are the backbone of the Australian economy, and they deserve more attention from politicians. Too many politicians do not understand the day to day challenges of working in and running a small business, and those who do probably are not heard when it comes to decision making.
Here are some specific ways in which a small business work experience program would benefit politicians:
- It would give them a better understanding of the day-to-day operations of a small business.
- It would help them to develop empathy for small business owners and their employees.
- It would make them more aware of the challenges and opportunities facing small businesses.
- It would help them to make better decisions about policies that affect small businesses.
I believe that a small business work experience program would be a win-win-win for politicians, small businesses, and, most important of all, the community. It would help politicians to better understand the needs of small businesses, and it would help small businesses to get their voices heard by politicians.
How important is online to your retail business?
You can’t avoid the importance on online to any retail business today. The percentage of retail sales made online continues yes to grow, and at some cost to physical retail.
While there are plenty of online failures, they are no different to physical store failures. There are plenty of online successes.
The year on year growth of 49% for a website connected to one off my shops is terrific, as this graph from Shopify from yesterday shows.
This business transacts more sales outside usual trading hours for a shop. More than 90% of shoppers are not local – they are people not in easy reach of the shop.
We are not doing anything special here. Indeed, we are following the advice we give to other retailers setting up a website for their business.
I urge newsagents who do not have a website connected to their business to get one – but be clever about it, don’t be constrained by what you do today, treat the website as a start up opportunity.
I have 4 Shopify sites connected to 3 shops and about to setup a 4th. There are many opportunities out there that can add real value to a retail business – as the Shopify graph shows.
Helping newsagents find local shoppers using the free Google Business Profile
The advice in this post was written for and shared with newsXpress members last year. I gave it to ALNA recently, to share it with their members. I share it here today to try and reach more newsagents.
This is free advice that costs nothing to implement and is likely to attract shoppers to your business.
Google Business Profile. Steps you can take to be more easily found.
Having an up to date Google profile is more important than ever. Google uses profile content to deliver search results.
Google‘s own data indicate that 46% of all searches have local intent. Use of Google Maps is common by people looking for something right now. Maintaining your Google My Business profile is the most important step to indexing well in local search and map results.
Google preferences Google My Business content in providing search results since it is verified content.
Sharing posts via Google My Business is possibly more important than what you share on social media.
Okay, so where do you start, what do you have to do? Here’s a simple to follow list. I have done this over the last few days for 2 of my businesses to ensure the advice is current.
- Do a Google search for Google Business Profile. It should bring you to: https://www.google.com/business/.
- If you don’t have a Google Business account, create one. If you do have an account, log in.
- Once in your profile, if your business is not listed, click Add business (top right), search for your business and request it be added. If someone else ‘owns’ the business listing it could take a few days to be released to you. If your business is not found in the search, add it manually.
- Do not rush this. Make sure you review everything.
- Click on the pencil icon to edit your profile.
- Choose your business category. Too often retailers select one. Select as many as apply to your business.
- Description. Make sure you describe your business. Use at least 500 of the 750 words allowed as Google uses this in search results.
- Hours. Make sure they are accurate.
- Location. Make sure your business location is correct. The service area is the area you serve. Choose wisely. You can put in multiple locations. So, put in your town first, then, put in the bigger city you are near if appropriate.
- More. Click on every option available under more as they matter in Google results. For example, noting the business as woman owned, if true, will help with results.
- Add a profile photo if you do not have one already.
- Click on the create post icon – it’s the third icon, next to the camera. Create a post.
- This should be about a product.
- Include at least one photo.
- Start with a headline.
- Write text. Aim for less than 200 words. Think about what people will search for. Have a good headline. Use paragraphs.
- If you sell the product on your business website, use the add a button option to add a link to the product on your business website.
- Google will check and approve the post.
Once you have done this, you should see the profile and post online in less than a day. Once that happens, the Google door is open for you.
Our advice is that you add a post at least weekly. Each post should be about a single product or single brand, something people are likely searching for. Keep the focus narrow. Write as you. Be relaxed. What is it you love about the product? Who is it for? Be grateful about having it available.
If you are just starting, consider a post a day for the first two weeks to get your content up and running, to encourage Google to notice you.
On the posts themselves, they should be more informative than, say, an Instagram post. remember, you are writing for people on their phones searching.
Google will preference profiles that offer fresh content. This is why I say posting weekly is important.
Your Google business profile works best for you when you have a website as that facilitates shopper browsing.
The other benefit of creating and maintaining a Google business profile that reflects your businesstoday is that suppliers will see it. This could help suppliers who pigeonhole you as a newsagency realise that you are not.
We appreciate some of you may have read this and thought it’s the last thing I need – more work to do. The thing is, more shoppers today search online than not.
Footnote: if you are thinking of paying someone to do this for you, I advise against that. This is your business. You know what you want people to find, and buy. A marketer or a friend will do more of what they want, and that may not match what you and your business need.
Now, we asked ourselves some questions for you:
- Can I use content I put on my business blog? For sure. Google may see it as duplicate so maybe trim it for your Google profile.
- How long should a new post be? Given that this content is most often accessed on the phone, 200 words is considered the max.
- How long do posts last? Currently, 6 months. It used to be 7 days. Google will continue to play with this.
- Should I always include a photo with a post? Yes.
- How many photos should I add? At least one. My suggestion is 4.
- How detailed should the photos be? Each photo should be one product, clearly visible.
- Should I use hashtags? Hashtags serve no purpose on these posts.
- Can I schedule posts? Yes, by using an external platform like Loomly, Sendible, OneUp or similar.
- What else do I need to do with the profile? Engage. Respond to reviews. Answer questions. Show the business as engaging.
Of course, it’s up to you if you create a profile for your business. It costs nothing and is likely to help people find you, and visit.
A small number of ignorant suppliers at the Melbourne Gift Fair
Sorry, we don’t think newsagents are right for us.
No, we only supply gift shops.
Newsagents aren’t right for us we prefer to be in baby shops.
Sorry but we prefer homewares shops over newsagents.
Yep, these are comments from a small number of wilfully ignorant suppliers at the gift fair in Melbourne this past weekend. They said it based on what they think a shingle stands for without looking at the business of the person asking, their website or their sales breakdown.
One gift wholesaler turned a newsagent doing $300,000 a year in gifts – more than plenty of gift shops near the newsagency.
One baby product supplier turned down a newsagent doing $60,000 a year in baby plush and related without even asking their baby related sales data.
The small number of suppliers turning down newsagents because they are newsagents are idiots. I kinda hope they lose sales as a result.
Now, on to good news about the trade show. There were plenty of premium gift and homewares suppliers happy to supply newsagents from businesses that are advanced in their transition from the traditional. These suppliers see opportunity.
Stand alone gift shops are finding it tough, you can see that in business closure and change of hands rates. The diversity of shopper reach many in our channel achieve is what makes us appealing to suppliers (smart suppliers at least) looking for longer term relationships.
How to easily identify dead stock in your newsagency
Dead stock is a waste of money and space in any retail business. In newsagency businesses, we tend to see plenty of dead stock in the stationery department. Too often, we see it in the card department too.
newsXpress provides contextual training to its members for sharing with staff. These short, snackable, videos relay training in a way anyone can understand. Here’s the latest (six-minute) training video on dead stock:
Here is a short video on how to easily identify dead stock using the newsagency software from Tower Systems, software used by more than 1,700 newsagents:
Working on dead stock is an easy win for any newsagency business where it has not been an active focus for a year or more. These videos are designed to encourage that engagement to release capital and space for more productive use in the business.
Why am I sharing this today? Primarily, to encourage all newsagents to work on dead stock. I know of one newsagency not that long ago where working on dead stock unlocked $15,000 in cash and a chunk of space. I know of another where the party buying the business contracted for a discount for old stock – they ended up paying less than half wholesale for 25% of the stock in the business.
This advice is designed to help newsagents today to run more efficient and valuable shops.
There is the bonus benefit from freely sharing this information of showing another way my businesses, newsXpress and Tower Systems, help newsagents to run more efficient and valuable businesses. It is important to me to show rather than tell. You can watch both videos without logging in or giving over your details, or signing up to some training course.
If you’re not a Tower newsagency software customer you can find out more here: https://www.towersystems.com.au/newsagency-software.html
If you’re interested in newsXpress, you can find out more here.
Now, if you think you don’t have dead stock, I think you’d be wrong. Every business I have looked at for dead stock has had dead stock. Yes, every business. Often this is because of a attitude of denial. Something does not exist if we deny it, right?!
You can easily see it it’s an issue in your business. In a couple of minutes you can see the value of dead stock. That alone is likely to have you making good decisions in your shop.
If you act and remove the bloat of dead stock you have a fitter, healthier and more focussed business.
But you have to act. As the leader of the business you have to act, even if it is to delegate the work. The videos are designed to be shared that way.
Go.
Inspiring quotes from Mary Tyler Moore
Back in the 1970s Mary Tyler Moore was a force to be reckoned with on television around the world. She smashed through the glass ceiling, creating successful TV shows, producing them and starring.
Mary fought against the odds, she confronted extraordinary competition. She won on her own terms.
Here are some quotes from Mary Tyler Moore, published by Huffington Post, on the news of her passing years ago. Some of these quotes are relevant to our businesses today.
- “Whatever it is, it’s OK because it’s what it is. Don’t be looking for perfection. Don’t be short-tempered with yourself. And you’ll be a whole lot nicer to be around with everyone else.”
- “I knew at a very early age what I wanted to do. Some people refer to it as indulging in my instincts and artistic bent. I call it just showing off, which was what I did from about three years of age on.”
- “I’m not an actress who can create a character. I play me.”
- “You can’t be brave if you’ve only had wonderful things happen to you.”
- “Take chances, make mistakes. That’s how you grow. Pain nourishes your courage. You have to fail in order to practice being brave.”
- “Having a dream is what keeps you alive. Overcoming the challenges makes life worth living.”
- “I’ve had the fame and the joy of getting laughter — those are gifts.”
- “Sometimes you have to get to know someone really well to realize you’re really strangers.”
- “You truly have to make the very best of what you’ve got. We all do.”
- “My grandfather once said, having watched me one entire afternoon, prancing and leaping and cavorting, ‘This child will either end up on stage or in jail.’ Fortunately, I took the easy route.”
- “I’m an experienced woman; I’ve been around … well, alright, I might not’ve been around, but I’ve been … nearby.”
The highlighted quotes are my faves.
Mary Tyler Moore has been on my mind recently because of the new documentary, Being Mary Tyler Moore, that shares plenty of fresh behind the scenes content of this icon.
Are Aussie shoppers more accepting of a surcharge for paying by card?
It feels like there is more acceptance of a fee for paying by card than there was a few years our so ago.
I suspect wider use of fees and the ACCC led controls on the value of a surcharge that can be applied are key reasons for this.
In our channel with low margins for newspapers, magazines, lottery products and agency lines more broadly, there is little capacity for the retailer to cover the cost. A surcharge can make accepting a card as a method of payment for viable.
Newsagents playing significantly outside the old agency space are under less pressure, especially if their product GP is north of 50%.
A surcharge also eliminates the minimum spend requirement.
The biggest challenge we have is that shoppers see us as all the same, meaning as more newsagents run with surcharges the more shoppers will expect we all do.
I’m not sitting here writing for newsagents to impose a surcharge. Personally, I don’t like them and don’t want them in my own shops. This post is an acknowledgement off the growing application of surcharges and what feels like less pushback from shoppers.
The key, like anything is business, is good communication, a narrative people understand and believe.
If you do do it, use your tech well to streamline the process and provide transparency to shoppers.
Newsagents save time and money with POS software connection for The Lott lottery tickets
Newsagents have benefited from the connection between their lottery ticket terminals from The Lott and POS software for years. The lottery ticket sales transfer automatically, without re-entering ticket values.
The link was completed by several software companies years ago. I know my newsagency software company, Tower Systems, did. Tower also made the link available for free.
I mention this today because of a story this week from one newsagent, using other software, who has been manually entering ticket purchases on their EFTPOS machine for customers who want to pay by card and to even recording the purchase in their POS – to avoid manual entry for a third time.
I know plenty off newsagents stop by this place. This post is a reminder.
The more keystrokes you can eliminate at the counter the more mistakes you eliminate and the more time you save.
Retail sales up in May: ABS report – insights for retail newsagents
The report from the Australian Bureau of Statistics on retail sales in May shows growth. The newsagency channel falls under other retailing: up 2.2%.
This is a little on the low side compared with I have seen in data from several retail newsagency businesses comparing May 2023 with may 2023, but not too far off.
Given the ABS data and the data I have seen from some newsagencies, if you were down in May you have to figure out why and have a plan to reverse the trend. The last position you want to be is revenue decline while others in your sector are experiencing growth.
While, for sure, there is noise in the press about consumer confidence, I am seeing people spend on what they love: strong card, gift, homewares and self-care product sales.
The state / territory results are interesting.
This does show a different in performance between the states and territories. NT, ACT, VIC and NSW, in that order, are the places to be. Tasmania, at the other end, has challenges. These geographic results are no excuse or justification for individual store results though.
Look, this data from the ABS is already a month old, and it’s general. The best thing any retailer can do is look at the performance of their business, comparing themselves now with the same period a year ago. We truly are our best competitors. That’s why I think, for sure, be aware of the BAS results – but look at your own business in more detail as it is from that analysis that a path forward will reveal.
Now, in case you are wondering about other retailers in other and worry that other retail may skew the results enough to explain where you sit compared to others, here’s the list from the ABS:
- Other retailing
- Newspaper and book retailing
- Newspaper and book retailing (4244)
- Other recreational goods retailing
- Sport and camping equipment retailing (4241)
- Entertainment media retailing (4242)
- Toy and game retailing (4243)
- Pharmaceutical, cosmetic and toiletry goods retailing
- Pharmaceutical, cosmetic and toiletry goods retailing (4271)
- Other retailing n.e.c
- Stationery goods retailing (4272)
- Antique and used goods retailing (4273)
- Flower retailing (4274)
- Other-store based retailing n.e.c (4279)
- Non-store retailing (4310)
- Retail commission-based buying and/or selling (4320)
- Newspaper and book retailing
- Cafes, restaurants and takeaway food services
- Cafes, restaurants and catering services
- Cafes and restaurants (4511)
- Catering services (4513)
- Takeaway food services
- Takeaway food services (4512)
- Cafes, restaurants and catering services
Another newspaper stand bites the dust
We moved newspapers from front of store prime position in the newsagency to a side wall barely a metre away, a less expensive space, less visually disruptive.
This is in a newsagency we bought in December 2021. We’re making changes slowly so as to not disrupt valuable regular shoppers and to do so within a tight capex budget – we are frugal when it comes to making changes in the shop.
Our shop floor location and space allocation is guided by GP contribution. Newspapers in this business generate around $15,000 in GP. This does not justify the prime position they had occupied in this shop for decades.
We will experiment with the freed space over the next couple of months to find the categories that work best, and cycle through them with changes every week to keep the visual offer fresh.
As the photo shows, our preference is for visual variety in colour, shape and size. This provides flexibility as to what we display here. This particular display is centred with self care and around that is allied products we think will appeal to the same shopper.
The big magazine unit behind this space is safe for now as it delivers north of $450,000 in revenue for the business.
Back in the day we would have brought in a shopfitter to completely overhaul the shop and spent $150,000+ more doing this. Today, our approach, and our advice to newsagents is – make changes over time, to give the shop a feeling of perpetual motion (change), do the changes yourself, or use a handy person – certainly not a shopfitter.
My point is – anyone can make changes like this in their business. Do it on a budget. Do as much as you can yourself. measure the results. Keep at it, keep making changes.
The value of playing outside what has been traditional is vital for the health or the local newsagency, or any local retail business
A few months ago in one of my shops we introduced a new product category, something we had never stocked before, something appealing to a demographic we have not pursued with our buying or visual merchandising.
So In the first 16 days of this month we have just clocked over $1,000 in revenue for this new category. This is on the back of a $5,000 investment in inventory.
We are forecasting 12 month revenue at between $20,000 and $20,000 allowing for a seasonal bump, while maintaining that $5,000 inventory investment.
We had no idea if this would work for us. The $5,000 was a gamble we were prepared to take. We thought and hoped it would work, but there was nothing in the store we could point to that would suggest it would work. As I noted, it was new for us.
I’m grateful it is working, that the gamble paid off.
Now that we are around 10 weeks in, we are seeing new shoppers in to shop the category. We know from comments that this is happening because of word of mouth.
What makes the success more enjoyable for us is that we are using a location in the shop that was not performing before.
The whole experience is the reminder of the value for local retailers of:
- Experimenting beyond what is traditional for your business.
- Letting your customers tell you what they will buy.
- Capping your spend.
- Tracking the results.
- Relishing every new customer you attract to your shop.
- Not letting your shingle define you.
We’ve not changed anything in the 10 weeks other than top up stock. The plan always was to let it sit for 3+ months before change. With the results as they are, we think only minimal change within the category is necessary.
Anyone can do what we’ve done. And, it’s not about the products we specifically chose. That’s up to you. My core message with this post is to actually try something different and see what the results are for you. Good or bad, you will gain valuable insights.
Decades ago, back when we were agents others made strategic decisions for our businesses. Today, strategy is yours to determine, and one of the most important is to pursuit of new shoppers for they are the lifeblood of local indie retail.
Scottish newspaper publisher encourages readers to transition from print to digital – why it’s no surprise and of little concern
Scottish news publisher Highland News & Media is transitioning print newspapers to a digital only model and announced this late last year. Now that the company has started to publicly action its plan, by encouraging readers to switch from print, newsagents are reportedly unhappy, as Hold The Front Page reports.
The Federation of Independent Retailers has slammed the promotional campaign as “cynical, aggressive and a slap in the face for news retailers”.
Its head of news Brian Murphy said: “Our members in Scotland are shocked and appalled at the aggressive tactics that Highland News and Media is adopting in its bid to steal their loyal customers away from their weekly printed copy to its online version.
“The way the publisher is marketing the digital subscription packages for its papers shows the total disregard it has for retailers who sell its printed products. This is a slap in the face for newsagents.
“Furthermore, we have been given no prior warning about this. The first we knew about it was seeing the heavy – and aggressive – promotion inside the newspaper.”
While I feel for the impacted Scottish newsagents losing print newspaper revenue, it is no surprise the publisher is making this move. It has been on the cards for more than ten years. Indeed, back in 2009 when the Seattle Post-Intelligencer moved to a purely digital model it was considered a crack in the dam wall of print newspapers.
Smart newsagents have adjusted their business model to not rely on revenue or traffic from print newspapers and to cop on the chin the whack the pitches from publishers in their print products to encourage people to move online.
Publishing companies have one prime obligation and that is to their shareholders, just as us retailers have one prime obligation, to our selves as business owners. The issue, I think, is that our channel, certainly in Australia, was birthed as as agency model, one in which we served publisher masters for a modest clip of each transaction. For well over a hundred years, again certainly here in Australia, we were treated as what I’d call last stop agents, the end of the line, the least important.
We were paid poorly, less than award wages, our ability to monetise our position as agents was stifled, we had no control over revenue growth and had to absorb the cost of increased operating costs. And, as the transition to digital for news access began in earnest in the 1990s, many of us were captured in our agent world, because we only understood that world of service for a low percentage.
Too many newsagents kept looking at the ground, barely a step in front of them, ignoring the horizon over which many opportunities could be found.
Publishers have played a role in holding newsagents back, keeping them in. their lane of agency service, because it suited them to keep newsagents subservient as they, the publishers, figured out how to shift eyeballs to screens from paper. And, too often today, as we can see in several places, newsagents are kicked to the kerb once publishers action their plan to encourage and push those eyeballs to screens.
But, as I have said, it’s no surprise when a news publisher quits print for digital. They can only subsidise an out of date news distribution model for so long, and print, for sure, is any out of date model. Heck, it’s been out of date for more than ten years.
My advice to Scottish newsagents (not that they have asked for it or need it) who feel aggrieved by the moves under way by Highland News & Media, is to look at what your business could be without reliance on print newspapers. This means stepping outside the usual lane for a newsagency business. Look at categories beyond those usual for newsagency businesses and usual for convenience businesses. It’s not too late. But, it takes urgent action, investment and courage.
Before I wrap up I want to comment on this quote attributed to Brian Murphy from the Federation of Independent Retailers speaking about the more by Highland News & media:
“It is a proven fact that newspapers are a key footfall driver, and research shows that people buying a paper will often buy something else at the same time.”
I’d be interested to see the data supporting this as here in Australia it’s not the case, and has not been the case since the 1990s. I have looked at basket data from more more than 1,000 retail newsagencies over many years and since the 1990s, newspapers have held their position as inefficient in terms of basket depth, hovering at around 80% of newspaper purchases being for newspapers alone.
Newspaper publishers told us for decades that the commission (margin) is low because they deliver foot traffic. While they did that, those shoppers had a single destination product in mind and nothing could switch them from that mission.
The quote from Brian Murphy also indirectly pitches that traffic, footfall, is important. While it was back in the agency heydays up to the early 1990s, for those of us who transitioned to new product categories with substantially better margins, four and five times better, traffic was not as important. Selling something worth $300 and making 60% delivered margin dollars equivalent to 450 newspaper sales.
Are newsagents selling items worth $300 and making 60% GP? I know plenty who do, in city settings as well as in regional and and rural Australia. I also know plenty selling an item for user $10, but also with a 60% GP.
I guess the heart of this issue for local retail newsagents with what is happening re Highland News & Media is to configure your business so you are not reliant on any single supplier. It’s your business, rely on you, not them. Sometimes that can mean upsetting suppliers. So be it. If your decisions are right for you, that is what matters.
What you want, of course, is to be in control of the decisions about your business, because – suppliers will make decisions that are right for their business and that can be risky if the decisions are made by a supplier that is critical to your business success.
Look out over the horizon, leek for change opportunities and lean into them. You decide what your business, what it stands for. Don’t be constrained by history. Don’t be limited by your shingle.
The challenge of winter in retail and how engaged newsagents can thrive
June, July and August are tough months in many local shops like ours. There is no major season, and, it’s winter. Brrr. Some who have been in retail for ages call these months the months of death – because it separates strong businesses from weak.
This year could be tougher because of interest rates and the penchant in newsrooms for stories negative about the economy and the future.
Here are 7 ways you could make these three months work for you.
-
Be happy. Make the shop bright, happy, smelling good and sounding good. Good lighting. Have a candle burning. Have an awesome playlist. Make your shop a place people enjoy. And, reflect this in your social media posts.
-
Pitch your offers consistently: discount vouchers, buy x cards and get a card for free. If you have value offers, pitch them in-store as well as on your socials.
-
Google My Business. Post several times a week. Be found by people nearby searching for what you sell.
-
Christmas in July. Get out any Christmas related stock you have and sell it off. Heck, host a Christmas party to launch it. Load the sale with other stock you’d like converted to cash. Consider a local charity or community group connection.
-
Bring in something new, something you’ve never sold before, something you thought you’d never sell. Challenge yourself to reach new shoppers. Launch it with an event. Put on some drinks and nibbles. Give people a reason to come out.
-
Get a second opinion on your business performance. Gather your data and ask someone to look at what’s working and what’s not. It could be that fresh eyes help clear a better path ahead for you. We will gladly help with this.
-
Pitch occasions like you would seasons. Bring together cards, gift bags and gifts to make it easy for people to celebrate: new home, baby arrival, engagement, wedding, congratulations and, yes, even sympathy. Choose one for a week or two and bring all the options together. Sometimes we have to show people what to do. The best opportunities here are the ones other retailers ignore.
My point with this list is that this valley, June, July and August, separates retailers. Those who do well tend to be engaged, they tend to embrace opportunities to make their own success.
This advice was first shared with newsXpress members as part of a broader regular series of business advice for making the most of every opportunity.
If you think closing your newsagency or your retail shop for good is the only option …
I get it. Sometimes, the road ahead can have so many obstacles and the air is so heavy with fog that a pathway can be hard to find.
In the Aussie newsagency channel you can collect a ton of obstacles and feel surrounded by fog if you are drawn to the end is near talk and have your business rooted deep in the past for our channel.
If you feel like closing is your only option, I am writing this for you.
Stop. Collect data – your sales data, your financial situation information, local economic circumstances. Gather all the facts together, and go over them – not the emotion, the hearsay – stick to the evidence, the facts.
Usually, in the evidence, there is opportunity. The challenge is that often opportunities cannot be seen because of the noise of obstacles and fog. That’s why I say stop, get your evidence and sit with that.
My hope is that in your evidence there is sufficient opportunity to find a path forward for the business, and for you.
Turning a situation away from closing is my only option can only come about by one or a mix of:
- attracting new shoppers
- getting existing shoppers purchasing more
- making more from some of what you sell
- reducing costs
It’s pretty simple when you read the list. The hard part is the action, that’s where retailers can get stuck. I mean, attracting new shoppers is difficult, especially in small business where the levers we can pull are limited.
The best way to attract new shoppers in any local retail business is to introduce a completely new product category, to represent it well in-store and to pitch it appropriately on social media.
Your existing suppliers won’t have helpful advice in this area because they are your existing suppliers. You have to look outside your current pool of advice and influencers and look outside what people know your shop for. Choose a category that is fun, appealing and for sure traffic-generating. Ideally, it will be something not easily found locally, something that interests you. That last bit is important because one way to drive traffic for a new category is to be a bit of a local expert.
I get that it may be challenging to find the energy and money to make things work with a new category. If the survival of your business matters you’ll find a way.
The best way to get existing shoppers spending more is through a smart loyalty mechanic and having a shop people enjoy.
The best way to make more from what you sell is by charging more or buying better, or both. Don’t go crazy. A modest increase in GP% could work wonders.
Key to the success of any turnaround is starting on the road early, before fog and debris block the past. It’s important to all of us who own businesses to be looking well ahead, over the horizon, cultivating assets we can deploy when we think change may be needed.
Before I leave the topic I want to touch on reducing costs. That’s a common approach to saving a business. While it could help, rarely in my experience have I seen reducing costs alone be enough to save a business. Sure, it can be in the mix, but it alone is not enough. And the truth is that a well run business has trimmed costs already.
If you think closing your newsagency is the only option, reach out. There are plenty of us in the newsagency channel who will listen, and offer advice if you’d like it.
You are not alone.
Mark Fletcher
mark@towersystems.com.au mark@newsxpress.com.au
https://www.linkedin.com/in/mark-fletcher-tower/
2023 newsagency performance benchmark targets / goals
Benchmarks provide business performance data points against which similar businesses can compare their performance.
Here are the recommended benchmarks for newsagencies:
- Gross profit: this is the goal gross profit for all product sales not taking into account any revenue or costs related to any agency business. The traditional newsagency average continues to sit at 28% to 32%. In an engaged newsagency, I think a GP% goal of 45% is appropriate.
- Minimum stock turn. That is, the number of times you sell an item in a year. This is a calculation based on current stock holding against total revenue for a year. Here are suggested stock turn goals by key departments. These numbers are based on what is needed at a minimum for a department to be valuable to you:
- Cards – 3. The average sits at 1.75. This is too low.
- Gifts – 7. This means a tight mix of products turning quickly.
- Toys – 5.
- Plush – 5.
- Ratio of Gift revenue to Card revenue: 100% minimum. The goal ought to be 200% or more. If you do $50K a year in cards, toe goal is to do $100K a year in gifts.
- Revenue per employee – $250 an hour minimum.
- Revenue PSQM $4,500 – $8,500 depending on country versus city / high street to shopping centre and depending of the product mix. Higher GP lower revenue required.
- Overall revenue mix percentage targets: Cards: 30%; Gifts/toys/plush: 35%; Stat: 10%; magazines/newspapers: 15%; other: 10%.
- Category performance notes:
- Stationery. Pens and writing products should account for more than 30% of revenue.
- Magazines. Crosswords should account for more than 6% of unit sales.
- Lifestyle cards. Should be more than 40% of total card sales. growth should be 12% year on year at least.
- Impulse counter items: (NeeDoh, sensory, putty, world’s smallest) should be more than 10% of toy and related sales.
- FLOORSPACE ALLOCATION: This is very much a store specific thing. That said: Cards: 20%; new traffic lines: 5%; Gifts/toys/plush: 35%; Stat: 8%; magazines/newspapers: 10%; other products: 10%; office/back room / counter: 10%. You don’t make money from your back room.
- Mark-up goals: Stationery: 125%; Gifts 110%; plush: 110%, jewellery 300%.
- Occupancy cost: between 9% and 11% of revenue where revenue is product revenue plus commission from agency lines. Location and situation are a big factor in this benchmark. For example, a large shopping centre business will have a higher cost than a high street situation. NOTE: It is easy to say the landlord is responsible for this ratio. As the retailer you are responsible for margin and revenue.
- Labour cost: between 9% and 11% of revenue where revenue is product revenue plus commission from agency lines. Labour cost should include fair market costs for all who work in the business. (See above).
Now, these are goals. I share them here for consideration. You should set your own, based on your own situation. The key is to have goals and understand why they are what they are. That’s the reason I have published this information developed by my POS software company Tower Systems and my newsagency marketing group newsXpress – to offer something of a starting point for individual newsagents to consider.
The local Aussie newsagency is changing. It’s likely not the shop you remember.
I made this video Tuesday for one of my shops, to promote it on social media as well as YouTube. below I explain how I made the video and, more important, why I made the video.
I took the photos on my iPhone and used promo.com to assemble these, add text and lay music underneath. All up it took less than 10 minutes. I share these details to illustrate how easy it is for anyone to make a video like this.
Now, the why.
This video is important as it is us pitching a narrative for this shop. For decades, the narrative of the local Aussie newsagency has been controlled by others. Today, in 2023, the narrative about our shops is rooted in decades ago. It is out of date. It challenges our relevance. It does not help us.
I wanted to have a crack at recasting the narrative for this one shop in a suburban Westfield centre in the bayside area of Melbourne. While for sure I am biased, I think it’s a good video that does re-cast the narrative for this newsagency, while at the same time making a statement about the channel, calling for others to see us differently and not as others so wrongly and ignorantly pitch us.
I’d love to see more newsagents do this, make videos and other social media content that pitches our businesses with a fresh and relevant to 2023 narrative. Points about lottery jackpots and the major seasons are predictable, expected. The more we play outside of what is expected the better for us, the more we are likely to attract new shoppers to our businesses.
As I noted above, this video took less than 10 minutes all up. There are plenty of platforms you can use to make videos just like this one. While I pay a commercial licence for promo.com, there are others out there that are free.
As for the products I chose to highlight, plenty are made in Australia. In fact, half the air time of the video features Australian made, small business sourced, products.
I want to call out the final frame. This features a pair of colourful stud earrings on a card that says you inspire me. That is a very deliberate choice to pitch that message at the close of the video.
Hopefully all this background is helpful enough that other newsagents create content to recast the narrative of not only their newsagency businesses but the channel more broadly.
But back to the video. In 24 hours it passed 20,000 full views thanks to a nudge through the YouTube ad platform. That’s 20,000 people in the area of Melbourne I targeted who watched the video in maybe the first newsagency pitch they had seen in years.
I appreciate it’s not call to action advertising. It’s not intended to be. As I wrote above, this is about the narrative relating to the Aussie newsagency. We all need to invest in this. It’s far more important than think tank meetings and the like by people who do not have their own capital tied up in this channel.
UPDATE: 26/05 @ 3:11pm. I’m pleased this video has not been played 32,000 times.
UPDATE: 06/06/2023 @ 7:18am. This video has now been viewed more than 102,000 times.
Is LayBy set to make a comeback in local retail, like newsagencies?
With the federal government set to announce today plans to regulate buy now pay later (BNPL) products under the Credit Act, it could be timely for local independent retailers to pitch LayBy.
The use of LayBy dropped away as BNPL like Afterpay, Zip and others offered shoppers easy access to finance for immediate purchases. While BNPL is used for many products outside the scope of LayBy, I expect the use of LayBy to increase once the BNPL regulations are in place.
While the ACCC defines the LayBy arrangement, LayBy is regulated at the state / territory level. In Victoria, for example, the regulations cover the contract, cancellation, price chan get and more. The level of regulation varies between the states / territories.
There is sure to be plenty of noise about the regulatory changes. I can hear some apologists for the BNPL businesses calling the moves those of a nanny state, lobbyists for the BNPL companies themselves saying that misbehaviour by a few has led to this and oh, self regulation would be better.
As a retailer, I like the BNPL products in that they helped drive terrific sales growth and they provided a level of shopper stickiness with regular BNPL users choosing shops based on their acceptance of the payment method. In one of my online businesses doing close to $500,000 a year, BNPL is the payment method for more than a third of all sales. At Christmas time that can jump to 50%.
In physical stores, the use of BNPL varies by retail channel, but it is a popular payment method, but often expensive to the retailer. Whereas credit card payments today typically cost retailers less than 1%, BNPL payment can cost as much as 6%. The benefit to the retailer is that there is no risk should the shopper default.
The anticipated BNPL regulatory changes give local retailers the opportunity to re-pitch LayBy. But first, we need to ensure our processes are fit for purpose, smooth, understandable, appealing to shoppers and economically viable for us. This is where retail management software comes into play. POS software can offer easy structuring of terms and conditions, managing the appropriate deposit, set different expiry terms for a LayBy based on the products in the LayBy, track payments, following up missed payments and tracking where LayBy products are stored. Plus, you can edit a layBy once commenced – by adding and removing stock, and you can manage partial collection of items in the LayBy.
Introducing a LayBy service fee could be a good way to qualify the LayBy shopper and cover some of the costs involved. There are retailers in Australia charing from $3.00 (Target) to $15.00 (Big W) in LayBy fees. Depending on how you structure it, this could be in addition to a cancellation fee.
My advice to retailers is to focus more on the expectation that all LayBys will be fully paid and collected on time, to consider LayBy as a positive service by the business and opportunity for the customer. Promote it. Welcome its use. Make managing it easy for you and the shopper.
Local retailers can make decisions around offering LayBy that could differentiate their businesses from bigger retailers.
News outlets will carry stories of the BNPL regulatory changes as they make their way to reality. This is why now would be a good time to pitch LayBy in-store and on social media.
Growth in Mother’s Day lifestyle cards
While I’ve only seen sales reports from a small number of newsagencies so far, an interesting stand-out in the Mother’s Day card sales is the growth in Mother’s Day Lifestyle cards. It is significant, noticeable. Now, that may have to do with supplier segmentation. It’s too early to tell.
More broadly on the season, the results appear to be okay, not brilliant, bot okay … up on last year.
Outside of Mother’s Day, I am seeing continued good growth in everyday captions, 10% and more. 2023 is developing as a good year for card sales.
May 16: via Zoom: Newsagency of the Future workshop
Join me via Zoom Tuesday May 16 @ 11am Melbourne time for a Newsagency of the Future workshop.
I will share up to date retail newsagency performance data, sales data from outside our channel for categories allied to what we do, thoughts on the rest of 2023 and into 2024. I will also cover some trends into the future that present opportunities.
There will be an open Q&A.
While Covid continues to circulate, it is over from a disruptive perspective. I think there are things we can leverage from the pandemic experience. I also think there are category opportunities for growing business GP% and attracting new shoppers.
I am not running the session to sell you anything, or to get you to sign ups to anything. My sole motivation is for the retail newsagency channel to be strong, vibrant.
It is a competitive world out there and I think all of us in retail newsagency businesses can do better.
Here is the link:
https://us06web.zoom.us/j/84982771189?pwd=RWdRM0s3bENpZ2F5UGxNblkzKzN3QT09
Meeting ID: 849 8277 1189 Passcode: 103292
I’ll record the session.
Anyone is welcome.
Are you making money in your newsagency?
I was talking with a newsagent the other day and was surprised to discover that they discover the profitability of their business twice a year, when their accountant meets with them, and even then, the information relates to a trading period from two or three months prior.
They have no processes in place to track and report profitability more frequently. They are not looking at GP% mix, say, weekly, looking for trends.
Their reasoning is that the accountant is the expert and that as the retailer they do not have the skills to understand the business performance at that level.
Not knowing business profitability at more frequent intervals and close to the actual performance is a problem for any business.
Gross profit is the pot from which you pay rent, employees, loans and yourself. Not managing that in a timely manner can see a business slip away.
Too often I see local independent retailers get caught in a narrative no one has any money or the economy is really tough or we’re busier than ever or no that doesn’t sell. More than half the time the statements are checked with business data, which is rare in itself, the statements are not supported by the business data.
My point here is that what matters more than anything else about newsagency performance and any local independent retail business performance is what business data report, your P&L, profitability reports from your POS software, your evidence. Your business data will guide better business decisions. Waiting a month or two for an accountant to provide their take on what they see is too long.
If you own a newsagency you need to be serious about your business data as it sets you up for trading profitably and selling more easily when that time comes.
So, are you making money in your newsagency?
Seek out that information and establish processes for you to have easy access to the information regularly. If you are not making money, your only option is to make changes in the business. There is never a real barrier to making such changes.
Fixing profitability starts with knowing where you are at.
What does your newsagency stand for? What’s unique about it?
In his 1960 book, Reality in Advertising, Rosser Reeves, a respected US advertising executive, introduced the world to the concept of the Unique Selling Proposition, USP for short.
Reeves defined USP in an advertising context:
- Each advertisement must make a proposition to the consumer: buy this product and you will get this benefit.
- The proposition must be one that the competition either cannot or does not
- The proposition must be so strong that it changes consumer behaviour.
In the 1960s and 1970s, the concept of a unique selling proposition evolved from being essential to advertising to being essential in business. Finding your business USP was considered mission critical to businesses, retailers especially. Businesses drifted however and forgot about the importance of a USP.
Today, it is common to see ads with we will not be beaten on price or if you find it cheaper elsewhere we will sell for 5% (or more) less. These pitches are from lazy marketers who think price is the most important USP and while it is a factor to some shoppers, value is often about much more than price.
Jack Trout told us a few years ago that USP was relevant today. In 2000, he said that a Unique Selling Proposition was mission critical in business in his aptly titled book Differentiate or Die: Survival in Our Era of Killer Competition.
Differentiate of Die. There is no doubt about the call to action in the title, no doubt about the consequences of inaction.
Yet many retailers, for the most part, have remained still in the face of an onslaught of competition. Some newsagents have remained still.
Retail is complex, challenging and changing rapidly today. The differences between competitors fewer. Retailers are surrounded by competition and it grows by the day. Yet many have remained still and done nothing.
Our channel continues to be confronted by the migration to digital, more local retail competitors and online shops selling what we sell. Those who have stood still feel the impact more than others.
Smart retailers are re-acquainting themselves with the writings of Reeves and Trout and leaning about the mission critical imperative of having a Unique Selling Proposition.
Differentiation could be service, products or location or a combination of these. Differentiation will most likely not be price as anyone can match this easily. Price is, after all, the last line of defense in any business battle. That said, there are some major price-focused success stories – WalMart for example. It is rare in an independent retail situation.
To develop your USP, engage with your employees and other stakeholders. or, do it yourself with your own deep dive into what you want your business to stand for. This is leadership. Take your time. Determine what you and your business stand for. Following open and honest discussion and debate, the USP around which everyone in the business can willingly congregate will emerge.
A good USP will not require an advertising campaign to communicate. It will become obvious through actions and decisions. By living the USP in every facet of the business you soon become seen as unique by shoppers and this can drive excellent word of mouth and success for the business.
While differentiation in retail is more important today than ever thanks to today’s economic conditions, the approach to the challenge is the same as in the 1960s.
If you are not sure where to start when considering your USP, look at your POS software and the data it curates about your business for in that data will be insights into your points of differences things you can cultivate to have a stronger USP.
Your POS software is a good place to start as your shoppers show you through their behaviour what they like and don’t like about your business.
No one can tell you what your USP should be. It has to come from you, from inside your business. It has to reflect what you believe, how you want your business to be seen and known.
Here are some things that are not a USP.
- Convenience is not a USP.
- Opening hours are not the USP they once were.
- Agency products like lotteries are not a USP.
- Magazine range could be a USP as many have moved on from deep range cover.
- Price is not a USP.
And while we are considering lists, here are some less than ideal things in business that could be a USP – note the strikethrough the S as they are not selling propositions but, rather, customer turnoffs that a retail business could become known for (in a bad way):
- Poor customer service.
- High prices.
- An EFTPOS surcharge.
- Poor range.
- Bad opening hours.
- Poor counter processes.
Here’s another list of some easy USPs:
- Local community connection.
- Community group support.
- Product range.
- Product knowledge.
- Fun in-store.
- Quality products.
- Value.
- Appreciation of shoppers (loyalty).
It can be tough coming up with something genuinely unique. But, once you have it, it can be worth the work.
Take your time. Do it yourself. Be the leader your business will love.
Australia to ban non-prescription vape products
The news that the federal government will move to ban non-prescription vape products in Australia brings clarity to a challenged retail category.
I do wonder what compensation will be offered to vape shops that have legally flourished in Australia. I suspect it will vale to state and territory governments to resolve this.
For what it’s worth I’ve advocated newsagents not get into the vape space as I felt it was always going to be more heavily regulated.
Given the news from the federal Minister for Health last night, now would be a good time to scale back if you are in this space.
It does come back to the question about the type of retailer you see yourself as being and the types of customers you want to attract. You’ll do better focussing on better margin new traffic attracting products.
As has been the case with tobacco retail for decades, price drives vape product sales. On price, it is tough for indie retailers to win. We do so much better focussing on higher margin products that people love and love giving.
Cards in the front window of the newsagency attract shoppers
This full face display of Mother’s Day cards in the front window is attracting passers-by into the newsagency on the busy Glenferrie Road in Malvern. That was the plan, our hope. It looks like paying off.
In December 2021, this space was taken by a drinks fridge, and ice-cream fridge and a stand of AWW cookbooks. Slowly we have change what’s here, culminating in the installation of this card wall a few weeks prior to Easter.
I think there is nothing better than awesome good margin products attracting shopper traffic from off the street. It’s a bonus if they are habit related products, products from a category for shoppers could return to you.
.
This shop is in a highly competitive location for cards with two newsagencies nearby, several supermarkets, more than 15 card and gift shops and an Australia Post outlet also with a good range of cards. We have the biggest range in the area, but it’s located in the card department inside the shop. I knew we had to bring a card pitch to the footpath.
While our card suppliers have been supportive, we funded this new fixtures ourselves, so that we control the use of the space. This will be especially critical with how we use the space outside of seasons, especially in the retail valley between Mother’s Day and Father’s Day.
On the space itself, we have the capacity to extend it to the left, to almost double the space. This will be needed for Christmas.
A bonus of this new card wall is that we no longer need seasonal card floor units. This frees up floorspace and assists traffic flow. Also, on the new wall, cards are better presented and more easily shopped than in a floor display unit.
While the pitch in the front window of the newsagency right now is Mother’s Day cards, it will change from may 15 to a different card offer.
We used a handyman to install the slat wall, this was a fraction of the cost of a shoplifter. We are frugal in managing our capital investment in this business, and in each of our shops. Our approach tends to be: make a change, measure the result, if good – move forward, if bad – re-group.
Too often over the years I have seen retailers access funding for a new or partial fit out and too much of that money be spent on changes that will not pay for themselves in 3 years. Funding it out of your own pocket makes you more cautious about the spend.
Be frugal. Follow your data. Take small steps. Back yourself over tradition.
Yes, a shoplifter may have created for us something more grand. I doubt it would have delivered a better financial return though.
While our shops are a reflection of us, they should not be a shrine or a showpiece, unless that makes money, turns a profit in the investment, in 3 years or less.
Footnote: some suppliers will be keen to engage with you on changes in your business. For sure, listen to them, but, it’s your business, not theirs.