Try this different approach to assessing the performance of products in your shop
Knowing for certain the performance of inventory in your business will support better decision making. Too many decisions in local indie retail, however, are not made based on evidence.
The very simple approach I outline in this post could be done by anyone, and it could lead to profitable changes in your business.
With retail space usually costing between 11% and 15% of (non agency) revenue, it is usually the next highest cost outside of the cost of stock itself.
Retailers often argue that rent should be lower. It could be that a different view of shop floor performance helps you achieve a better return.
- Take a blank sheet of paper, ideally A3, and roughly sketch out the layout of your shop, marking in display units, shelving, the counter – everywhere you have product. Include your back room if you have stock there.
- Colour-shade the layout by department.
- List the departments on the side of the floor plan.
- Calculate the percentage of total space used for each department. This does not need to be accurate to two decimal places. List this next to each department you have listed.
- Use your POS software to report on gross profit dollars earned by each department over the last year, or calculate it from sales figures knowing the average GP% per department.
- Calculate the percentage of total gross profit contribution earned by each department and list this next to the floor space allocated to each department – on the floor plan map you have done.
- Circle in green those performing the best, where the GP% contribution is more than the GP% space allocation, and in red those performing the worst.
The goal is to show you the performance by space, so you can work out if you should give more space to a category or less. Many shops don’t make changes to their shop floor by moving categories or increasing or decreasing space allocation. The evidence revealed by this quick GP analysis could lead to valuable changes.
Typically, a business owner doing this for the first time will have an ah ha moment, seeing something they had not realised.
I have seen business owners make changes including to floor layout, quitting suppliers and increasing stock weight for some departments.
You can take the analysis a step further by looking only at one department and analysing performance by category, using the method outlined above.
What I have outlined here is very basic, easy to do. It’s not something you need an accountant to advise you on. There is no downside is spending the new minutes it takes to do. So, do it!
Is there any interest in coronation memorabilia in Australia
I don’t think it will sell that well, people don’t like him.
And with that, the group of four retailers moved on from this stand offering coronation memorabilia at the Spring Fair in Birmingham yesterday.
There were several stands with products. The displays did not appear to attract people from what I could see as I walked past.
In the group of four I overheard there were 2 girls and 2 guys. The age range of this group I eavesdropped on was from 20s to 60s. They all agreed as to popularity, or not as it was in this case.
I’m aware of a couple of Australian importers pitching coronation memorabilia. It will be fascinating to see the interest in Australia.
I think there is a big difference between the pitch cushions, mugs and similar and commemorative mint coin sets. I suspect 2023 will offer us some good opportunities with the latter.
I didn’t come to Spring Fair to look for or consider coronation related products. On first glance I was surprised to see them, but it makes sense here in the UK.
Smart buying: Having products that sell for more than one reason, to more than one type of shopper
The more we stock our shops that appeal to multiple buying situations the better for our retail businesses, the more efficient our inventory investment, the more opportunities for out of store promotions.
This candle is a good example of what I am talking about.
Candles are candles, right?! They are everywhere. Many different types of shops have them. The marketplace is covered well for people shopping by scent and different types of ingredients. And, new local makers are popping up almost daily.
This candle, by virtue of the fun text on the label, offers a different reason for purchase. It’s fun, self-deprecating, a good conversation opportunity when given.
Having items that could be purchased for more than on reason helps improve inventory efficiency in the business. In local small business retail this is especially important. If an additional reason is humorous related, it’s a bonus.
A candle like this in a town with plenty of candy outlets gives you differentiation.
This candle is an example. There are plenty of products you can buy to serve this purpose. My suggestion is to look for multiple purchase opportunity products, to expand the appeal of what you sell, and to provide you with opportunities to reach more possible shoppers through out of store marketing.
Why big retailers have ramped up their loyalty pitch in 2023 and what local newsagents can do about this
The major supermarkets, several other retailers and non-retail businesses are spending big pitching their loyalty programs already this year.
Their pitches tend to cast their loyalty program as key to unlocking value for shoppers. Value in this context should read as lower prices. It’s a big business code word. Value is bandied about in meetings as if they are doing something good for shoppers when, in fact, it’s marketing fluff to get people thinking they are saving money.
I think their increased focus on loyalty is their response to inflation and consumer sentiment associated with this.
Shoppers are concerned about prices, especially in must-purchase settings. From data we see, with want purchases, discretionary purchases, price is less of a concern.
I have found the best way to pitch value, real and genuine value, is through an easily understood loyalty program that does not compare to the poor-value over-hyped programs from the supermarkets and similar.
Seriously, what is a loyalty point worth anyway?
At my software com pay, Tower Systems, the specialty retail POS software / newsagency software has a good loyalty points facility in it, it’s the discount voucher loyalty program that many hundreds of my own retail customers prefer. I use it in my own shops and have done consistently since it was released 9 years ago.
Each voucher has a dollar value. People understand $$ more than %.
On average, 19% of vouchers are returned and of those returned, a third are redeemed the day of, a third within 7 days and the last third within 28 days.
Guys are more likely to redeem right away whereas girls are more likely to redeem a week or more later.
Discount vouchers work particularly well with habit-focussed shoppers.
In settings where shoppers don’t want the vouchers, there is an opportunity for a local charity connection, which extends the reach of the discount vouchers, better connects the business to a local charity and helps leverage that charity’s community to support you.
My advice, if you’re interested, is to take note that the major retailers are pitching loyalty more this year already. Consider what you can do in your business to engage with shopper interest in value.
Now for a sales pitch:
Find out more:
- www.towersystems.com.au
- 1300 662 957
- sales@towersystems.com.au
Thanks for reading.
Tower serves 3,000+ local specialty retailers across a range of product channels and are grateful to serve beyond our POS software, with retail advice and inspiration – to help local small business retailers compete and enjoy their businesses more. This is where local value can be nurtured and shared.
Covid bloat in the supply chain
We continue to see Covid related bloat in parts of the supply chain, especially where products are sourced from China and have been unable to easily ship over the last 2 years.
From what I have seen, it appears most common with lower end gift and homewares products, from lesser known suppliers.
I think it’s important to be aware when considering product purchases – to ensure you’re looking at current design rather than products from two years ago.
Too many new newsagents are not aware of electronic invoices
I’ve heard from several suppliers recently that new newsagents are not aware of electronic invoices. While some handle their magazines with electronic invoices, apparently they say they did not realise they were electronic invoices and did therefore not think of this for other supplier situations.
This is a basic problem in the channel, for newsagents and suppliers.
There needs to be a co-ordinated effort to get more newsagents online with electronic invoices from the many suppliers that offer them.
Through my own newsagency POS software company, Tower Systems, we pitch it regularly, offer free training, offer a free stock file and invoice check service as well as working with suppliers to get them on board. It’s a time consuming process to bring a supplier on board. We work with their tech people, account management people, accounting and others as there is often a misunderstanding as to what is involved and the value for their business.
My newsXpress business is involved, too, as it tends to work with newsagents who are not traditional suppliers to our channel
I think one area where we (newsagents, software companies, newsagent suppliers and newsagents) need better engagement is when newsagents sell – they need to do a better job of training incoming newsagents.
Every time you type details of a new stock item into your computer system or manually process an invoice for stock you have received, it costs labour time and could result in data mistakes, which could lead to bad decisions.
Electronic invoices save time, and they cut mistakes, they help newsagents make more money.
For Aussie newsagents in the convenience space, CAEM fixtures are worth checking out
CAEM's complementary Newspaper, Magazine and Snack Displays are perfect additions for store shelving within newsagents, or for anyone wanting to display literature (for example, in estate agents or travel agents): https://t.co/M4IwRDZiOR #retaildisplay #retaildesign
— CAEM Group (@wwwcaemnet) January 9, 2023
3 things any retailer, and newsagent, can do to compound profit
Individually, these strategies work, in any retail business. Done together, and consistently, the profit value compounds. I say compounds as each of the three strategies feeds into the other.
- Chase new customers. Serving the same customers is likely to give you the same results. Every day, do something to attract new customers through: a brilliant and different window display, engaging social media posts, a community group connection, a club member fundraiser.
- Maximise gross profit percentage. Buy at the best price you can. Be engaged in how you price what you sell. Every cent matters. Rounding up to .99 is a good start. Pricing based on the value you offer is more important than trying to compete with the cheapest. You’re worth it.
- Drive a deeper basket. Be smart about what you place where in the shop in pursuit of people buying more. At you’re counter and at the busiest points in the shop, make adding things to the purchase easy. Look at what people buy with what and use that to guide product placement. Use smart loyalty tools to disrupt shopper behaviour.
It’s easy in local small business retail to get caught doing stuff when what really matters is those things you can do ton drive profit, which increases the value, today and tomorrow, of your business.
Pitching everyday stationery in in the newsagency in a fresh and fun way
Rather than the usual function focus of stationery, newsXpress has released a batch of digital collateral to its newsagency members designed for social media that pitches everyday, and some forgotten, stationery lines in a way that is fresh and, I think, fun.
I mention this today because it is easy for shoppers to forget we stock these everyday lines. We need to engage with pitching them, to capture sales that can otherwise go elsewhere, including online.
Everyday we need a fun and fresh pitch on social media, and every so often we need to promote these to get them in front of people outside those who already know about us.
Posts like these are easy to make and of the marketing groups can do them, and even individuals can do them. The time investment is not considerable.
While for sure what you do in your business is up to you, and I know no one will retire on the proceeds of these posts. But, they are a good small step no cost approach to making the store relatable, and fun, and that does count for something.
I guess the other point I’d make is these posts are not what one might expect from a bug business competitor, and that matters.
January is a perfect time for a magazine relay in your newsagency and here’s why, and how
A magazine relay takes a few hours and you are sure to sell more magazines as a result. January is a good time to do a relay because your’re probably less busy than usual, unless you’re in a beach location.
In my experience doing relays for many years, the return for a few hours work is many times over in a short time, usually within a m month.
So, why do a magazine relay? because you will make more money.
Now, to the how:
Typically, a relay of 1,000 magazine pockets can be completed in 4 hours. If you have 250 titles, you should be don in under an hour.
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, detracts from the products. I say don’t use headers.
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.
DOING THE RELAY.
Start at one end of a fixture. Take off all the titles for between 6 and 12 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 4 to 8 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.
- Train titles should no co-mingle with railway magazines.
- Classic car titles need to be distinctly separated from regular car titles.
- 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.
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.
…
Footnotes:
This is an update to advice I have publishers here several times in the past. I share it again as it is an easy in.
And, yes, I get that we make too little from magazines. In my view, we either quit the category or make the most of it. I’m choosing to make the most of it because I know a relay helps me do that.
HEY AUSSIES, THE LOCAL NEWSAGENCY MAY NOT BE WHAT YOU THINK IT IS (PART 11)
The former owners of Paperplay Inverloch were early adopters of change their then, years ago, newsagency business. While the business did have lotteries, it relied on newspapers, magazines and other newsagency lines seeing the folks of Inverloch, Victoria.
The shift in the business was gradual, driven through product purchasing. As the range of products diversified, some traditional lines remained, but took a back seat. Midway through the journey of change, the business changed names, to reflect the non traditional offering. Bu this time, books had become an important part of the business.
Locals embraced the change. Covid propelled that further as Paperplay Inverloch offered locked down locals easy access to products you usually find in the city hours away.
While these photos are from a year and more ago, they reflect part of the diversity of offering of Paperplay Inverloch.
This series came about because journalists and news outlets prefer a narrative that the local Aussie newsagency is rooted in the past. They are wrong for many ‘newsagency’ businesses. Paperplay Inverloch is a good example of that. It plays against the ignorant narrative media outlets run.
We need better journalism when it comes to reporting about our channel.
It’s not too late for any newsagent tom embrace change and tradition. There are plenty of people in our channel ready to help. It starts with you asking the question.
Every newsagent, every retailer, needs to find their own way. In my experience. the best pathway to this is product choices. Playing outside the usual walls for a newsagency is a start. but, remember, in retail we need to find a need and fill it, and, we are not our customers.
HEY AUSSIES, THE LOCAL NEWSAGENCY MAY NOT BE WHAT YOU THINK IT IS (PART 9)
Continuing the series of shining a light on businesses that offer outside what is assumed to be in a local Aussie newsagency in newsXpress Candlewood in Western Australia. This business is close to the the Indian Ocean so it makes sense that their products have the beach flavour as you can see in these photos. This is a shop local visitors love for the gifts and other things they can pick up as a reminder of their trip.
The other different is product price range. Many of these items are gifts beyond trinkets some think are in a newsagency.
newsXpress Candlewood is a good example of a business that has transitioned beyond what many journalists and others think of as the local Aussie newsagency. It’s a testament to Julie and the team for what they have created is relevant locally and certainly not the traditional old-school newsagency.
I am grateful to newsagents like Julie for sharing photos so I can share them here, to reinforce the pitch that the local Aussie is not what many people think it is.
HEY AUSSIES, THE LOCAL NEWSAGENCY MAY NOT BE WHAT YOU THINK IT IS (PART 8)
newsXpress Bairnsdale was your local traditional newsagency, and then things changed. Now, it’s a vibrant gift shop attracting not only local shoppers, but people from outside of town, as well as online – from interstate. David (Tas as he likes to be called) and the team are constantly innovating. During Covid, they pivoted to creating personalised gifts and doing so very well.
Here are some photos of the business that speak to it as a business outside of what many in Australia would consider a Newsagency. Remember, I am sharing these photos to combat the assumptions too many Aussies, including journalists, tend to make about the local newsagency.
Thriving local Aussie Newsagency are not what they used to be, as these photos show. newsXpress Bairnsdale is in a regional Victorian town, far from Melbourne, and on the road to New South Wales. back in the day it would be traditional, but now it has to be innovative retail, and it is. It’s a testament to the vision and work of David and the entire team in the business.
What makes this business even more interesting is that it does not have lotteries – a further break from the traditional.
HEY AUSSIES, THE LOCAL NEWSAGENCY MAY NOT BE WHAT YOU THINK IT IS (PART 7)
Randalls newsagency in Bourke New South Wales is a perfect example of innovative retail in our channel, offering products outside what has been traditional for the local newsagency business, and taking that diversity online to reach shoppers far away from Bourke. In a town of less than 2,000 that is 800km from Sydney, here you have inspiring retail.
Nancy and the team at Randalls newsagency and their website, Back O Bourke Collective run an awesome business, a business that challenges what we think of as a newsagency.
This series is about showing journalists and others that the local Aussie newsagency has changed and while, for sure, there are some running old-school newsagencies rooted in the 60s and 70s, many have transformed their newsagency businesses to be fresh, inviting and vibrant. many are running local newsagency businesses that are changing, evolving, meeting new opportunities.
This is retail in 2022 and beyond, especially local retail, and even more especially local newsagency retail.
The Aussie newsagency channel was created in the 1880s to deliver news publications to the goldfields of Victoria. For decades ours were agency businesses, doing the bidding of the companies for which we were agents. It is only in the last 20 years that some in our channel decided to be retailers rather than agents.
Today, the newsagents who are growing their businesses are retailers first with either no agency business or modest agency business that does not dominate what they do in their businesses.
The local Aussie newsagency has come a long way from what Aussie journalists and others think of us as. The more show how far we have come, the better. This series is about shining a light on some good examples of this, some good examples of retail newsagency businesses that are quite different to what people expect when they think of the classic Aussie newsagency.
Shops like Randalls newsagency in Bourke NSW are a beacon not only for retail newsagents but for local retail more broadly. They are showing that location and size do not matter. They are showing that you can grow by thinking outside of the physical boundaries of your local town.
Whether it is in-store online, there are no borders to what a local newsagency can be, and this is exciting.
What is the future of the local Aussie newsagency? Well, that is up to each newsagent, each retailer in the channel. There is no channel-wide problem. rather, there are thousands of local retailers making decisions every day that will determine the future, and from where I sit, with what I get to see from many colleagues, the future is bright.
HEY AUSSIES, THE LOCAL NEWSAGENCY MAY NOT BE WHAT YOU THINK IT IS (PART 6)
Too many journalists and too many Australians think of the local Aussie newsagency as a paper shop selling magazines, lottery tickets, cigarettes, lollies and stationery. That may have been case twenty or more years ago. Today, it’s different, the local Aussie newsagency is different. A good example of how different is newsXpress Numurkah in Victoria. In this small town of under 5,000 people you can find newsXpress Numurkah, a wonderful and vibrant shop, which is also home to a terrific online baby shop.
These photos tell the story of a vibrant and attractive retail created by Andrea and the team:
The mix of products and price-points plays against out of date assumptions too many make about what a local Aussie newsagency stock and offers.
newsXpress Numurkah is also an excellent example of excellent retail in our channel in regional and rural Australia. The whole team in the business should be proud for their representation of the local newsagency in Numurkah.
HEY AUSSIES, THE LOCAL NEWSAGENCY MAY NOT BE WHAT YOU THINK IT IS (PART 5)
newsXpress Parks is a gift and homewares beacon in this town in Parkes, 5 hours from Sydney. Greg, Christine and the team have been leaders in the newsagency channel in gift retailing, playing outside of what has been traditional in a newsagency for more years than most. And, it’s paid off. This shop looks nothing like what many Aussies would expect to see in a newsagency.
Like they say, a picture is worth a thousand words. These photos from newsXpress Parkes show a transformed, vibrant and appealing retail newsagency serving a regional town in NSW.
I hope suppliers are looking at these photos, especially if they think they have products ideal for a newsagency business.
We are seeing more and more retail newsagecies like this one in Parkes, and it’s inspiring!
HEY AUSSIES, THE LOCAL NEWSAGENCY MAY NOT BE WHAT YOU THINK IT IS (PART 4)
newsXpress Highlands Marketplace in Mittagong NSW not what Aussies expect a newsagency to be like. There are wonderful gifts, fun gifts, offering locals shopping opportunities they are enjoying. Jenny and Craig and the team curate a wonderful selection of gifts and homewares, attracting shoppers from around the area. What’s terrific about this business is that it is perpetually evolving.
The diverse range of products are key to the success of this business in attracting shoppers outside the usual newsagency shoppers that we may think of.
For decades, the Aussie newsagency channel sold what what it was sent by suppliers. In the 1990s this really started to change, with some newsagents embracing being retailers. That transition is a challenge, and some are yet to make it in Australia.
The team at newsXpress Highlands Marketplace were early adopters and their business speaks to this and their commitment to chasing change.
Hey Aussies, the local newsagency may not be what you think it is (part 3)
newsXpress Leven in Ulverstone Tasmania has transformed from a traditional local newsagency into a thriving gift destination for locals, tourists and people from outside of town who appreciate the range on offer and the service. Sharene and Wayne have transformed what was a traditional newsagency business from decades ago into this fresh and appealing shop. And, yes, this is a local newsagency …
When we read news articles about newsagency businesses they tend to be rooted in years gone by, and the photos accompanying such articles reflect businesses that look nothing like I am sharing here. It is frustrating in that our channel has many newsagency businesses embracing change and offering retail experiences outside of the traditional we read too often about.
newsXpress Leven is testament to the willingness of Sharene and Wayne to seek out and embrace change. It’s a newsagency for sure, but much much more than that.
One thing to especially notice about this business is the fitout. They have done this themselves. Brilliant!
Hey Aussies, the local newsagency may not be what you think it is (part 2)
Mount Lawley News in Western Australia is a small shop located a ten minute or so drive from Perth CBD. I mention that to reflect that this shop is surrounded by competition.
What was a traditional newsagency has been transformed by new owners Matt and the team over the last year. This is a good example of what I’d love journalists and other who talk or write about Australian newsagencies to think of.
What an awesome looking business.
A year ago this shop looked very different. Today, it is attracting new shoppers. New shoppers are the lifeblood of retail. Better still, the change in mix of products drives a change in the GP% of the business. These are factors that play into the strength and value of a newsagency, or any retail business for that matter.
We see too many stories about newsagencies closing. Sometimes, photos accompanying those stories do not reflect the best practice retail we are seeing from plenty of newsagents, like Mount Lawley News.
Hey Aussies, the local newsagency may not be what you think it is (part 1)
Take a look at part of the Christmas story at newsXpress Sarina, located half an hour out of Mackay in Queensland. Sarina has a population of 5,000. The shop is a stand-out in town for Ita range, and its retail innovation.
What a joyful shop to shop!
Too many journalists and too many Aussies think of a newsagency as we were twenty or more years ago. Times have changed for many, thankfully. Many newsagency shops today are innovative, inviting and thriving!
What Shelley, Mark and the entire team at Sarina does is excellent, best practice retail. Their shop attracts people from out of town. years ago, theirs was a more traditional shop. They have made it what it is by leaning into change.
newsXpress Sarina is a good newsagency journalists and others need to think of next time they go to talk down our channel.
NSW Back to School vouchers a good opportunity for newsagents
NSW newsagents have a terrific opportunity with the Back to School vouchers. To participate, you need to register with Services NSW. Parents can get three $50 vouchers for each school-age child.
Newsagents using the Tower Systems newsagency software can access advice on setting up for receiving vouchers as a form of payment and how to handle vouchers in a sale transaction.
My advice to newsagents is to gently pitch that you accept the vouchers on your social media pages as well as in-store. Also, ensure that all team members know you accept the vouchers and how they should process them.
Parents and carers can start using the vouchers now. I think being early in your pitch is key here.
The Services NSW website lists what vouchers can be used for, including these stationery items:
-
- exercise books
- pens/pencils
- coloured pencils/crayons
- textas/highlighters
- erasers
- pencil cases
- rulers
- sharpeners
- glue
- scissors
- calculators, or
- geometry sets.
The other important note is that you can’t give change for a voucher. If any value is left, it is forfeited.
These vouchers are a terrific opportunity for local newsagents and now is the time to embrace the opportunity, not after Christmas, not in the New Year.