Okay, the background is not ideal and the voice is not as natural as I’d like BUT AI generated videos and scripts have come a long way in the last few months. This lady loves cards and newsagencies.
I’m not planning on using the video publicly except here. I am sharing it to show what can be created in a couple of minutes using the latest in AI video generation. This AI world is evolving rapidly, at a pace faster than even AI experts predicted a few months ago.
There are many ways in which AI will play into opportunities for small business retailers, like newsagents. In the Tower software, for example, several AI options were released two years ago to help newsagents create better product descriptions faster.
AI-generated videos can reduce the need for professional videographers and editors, saving significant costs. AI can compile and showcase customer reviews in video format. AI can quickly produce eye-catching video ads for special occasions and promotions.
Recent advancements in AI video generation have been nothing short of revolutionary. Models like RunwayML Heygen and Stable Diffusion have pushed the boundaries of what’s possible, enabling users to create stunningly realistic videos from simple text prompts or even existing images.
One of the most exciting developments is the ability to animate still images, bringing them to life with fluid and natural movements. This has opened up new possibilities for creative expression, allowing artists and designers to animate their artwork in ways that were previously unimaginable. I made a video with a photo of me and was shocked at what it could create from one still image.
Another significant breakthrough is the emergence of AI-powered video editing tools. These tools can automatically identify and remove unwanted objects from videos, enhance video quality, and even generate entirely new video content based on existing footage.
Now, in all of this, there are opportunities for local small business retailers to not use AI and be genuinely human, to be real. The challenge is that this new AI tech will flood platforms with content, making your human content harder to notice.
The skill to consider developing right now is smart promoting iof AI tools so that the content generated for you is from part of you and reflects you in one way or another, a part of you that speaks to the message of your business.
A few months ago, I embarked on a small experiment: building a website for a local suburban Melbourne shop, my newsXpress Mount Waverley shop, on a tight budget and following the advice I give to other retailers.
The goal was to test the waters: to see what could be achieved with minimal investment, to see if the advice provided, when followed, is financially valuable.
Starting with a modest product range, the website quickly began generating sales. As I discuss in this video, which was shot late last week, in the seven weeks to filming, this simple online store has raked in over $18,000 without any additional marketing spend or inventory investment.
In the last week sales have surged further, the website has delivered over $5,000 in revenue in seven days. Not one sale has been to an existing customer. On top of this, the website has driven excellent growth in in-store shopper visitors: they find the product on line, find out where we are, and they shop in-store.
This video takes you behind the scenes on what we have been able to do through the Hugs and Love website integration with our Tower Systems newsagency POS software into the Shopify website.
The Hugs and Love website (www.hugsandlove.com.au) is a prime example of how seamlessly integrating Tower Systems POS software with Shopify can streamline online sales and fulfilment processes for local businesses. This powerful combination allows businesses to efficiently manage their inventory, process orders, and fulfil purchases both in-store and online. By leveraging the strength of these two platforms, local shops can:
Expand their reach: Attract new customers and increase sales beyond their physical storefront.
Simplify operations: Streamline inventory management and order processing, saving time and reducing errors.
Enhance customer experience: Offer a convenient and efficient online shopping experience.
The experience with this website has been valuable in helping us see what is possible in the shop.
I am always telling retailers who are creating their first website to launch early and launch often. Where we started with Hugs and Love in terms of products is different to where we are at today. We quickly discovered opportunities, and we leaned (hard) into them. This has been a key factor in making money. It has also provided a runway into 2025.
I see newsagents, and other retailers, make mistakes with their websites, big mistakes, expensive mistakes. Keeping it simple and developing on a frugal budget is best. Having as much control yourself as possible is key too.
The most important advice that the Hugs and Love experience has reinforced is that a good website is a good plan B. It provides you opportunities outside of the shop you know, in case you want an option away from the shop.
Now, here’s the pitch: what I’ve done with www.hugsandlove.com.au is bring together the newsXpress retail experience and the Tower Systems newsagency software experience to create a solution that could work in any newsagency regardless of location or size. As I said, it’s a pitch. It’s also an explanation of how you can make money: take the Tower tech, the newsXpress expertise, a frugal budget and some of your time and you can achieve a return on investment that is likely to be better than the return you are getting from your shop today.
When we consider the newsagency of the future, one option is that it is this, it is playing away from the boundaries of your four walls and the expectations and restrictions of the newsagency shingle. It is about harvesting shoppers far away from your business, learning form the data they share and turbocharging your business growth with almost no additional capex, labour investment or space investment – delivering bonus net profit to your bottom line.
I’d be happy to talk one on one with any newsagent on this 0418 321 338 or mark@towersystems.com.au) , to take you further behind the scenes or to verify any of the information I have provided here.
I have been assisting a newsagent over the last two weeks in their lease negotiations. Their landlord, a well-known national business, is insisting on an annual rental increase of CPI + 2% and a similar increase on their mandatory marketing fund contribution. For this particular landlord the increase being sought in new lease agreements is more than in recent years – a consequence of the Covid years I suspect.
The landlord refuses to consider that a significant portion of what is sold in a newsagency, even a newsagency that has transformed from the traditional, comes from products over which the retailer has little or no control on the sale price. Indeed, plenty of products in any Australian newsagency have experiences price suppression over the last five years, making newsagents worse off in real terms.
While the person representing the landlord locally appears to have no wriggle room on the annual increase, they have some capacity on the base rent. It’s not enough though to make this tenancy viable from my perspective, especially when you take on board the restrictions in the lease permitted use clause.
Through the retailer, I have provided the landlord with comprehensive data on product price history to support the request for a fairer approach to the annual rental increase as well as evidence of a typical ‘newsagency’ today to expand what is covered in the permitted use clause. They appear to be unswayed by the evidence presented.
Talking about the situation with a leasing consultant last last week, they commented that they, too, had noticed a toughening of position by several major national landlords in their negotiations with small business retailers.
I mention this today to people who stop by here, newsagents, suppliers and landlords, to encourage them to understand the pressure newsagents, especially those in major shopping centres, are under.
I ask that suppliers consider this when setting your product prices and determining the gross profit your wholesale model permits for retailers. Your decisions impact the capacity of newsagents to pay the lease cost hikes set by landlords.
I ask that landlords treat newsagents differently to other retailers who do have more control over their priced. Plenty of suppliers will back up what I have shared here.
I ask that newsagents actively consider the value of being in a major shopping centre. The value has diminished over the years. Better opportunities outside exist in many situations. If you are not happy with a lease, don’t sign it. If you have any concerns whatsoever about your capacity to fulfil the obligations of the lease, don’t sign it. If your lawyer on reviewing the lease recommends against it, don’t sign it. There are many other options.
With overheads (insurance, power etc.) up by 10% and more and the retail award expected to increase close to 5% again this year, newsagents are having to increase their sales by more than 5% and increase their overall business gross profit by one or two points to not fall behind let alone move ahead.
In my work with the newsXpress group of 200 newsagents, the key focus right now is about:
Maximising the gross profit on every item over which they have price control.
Maximising shopper visit efficiency (from a deeper basket each visit).
Maximising shopper value: bringing the shopper back sooner.
Maximising stock turn and thereby maximising return on inventory investment.
Maximising return on labour spend: by working on operational efficiency.
Back in the day, when our channel was a government protected monopoly, these things did not matter. Opening the shop door in the morning was all we needed to do to thrive. There was plenty of business to cover parts of the business that were not performing well.
Today in newsagency businesses, every supplier, every product, every staff member must perform. There is no slack to cover failure. (Suppliers take note.)
Also today, newsagents must play further afield, further away from what has been traditional for newsagents. Fashion, coffee, greenlife, licenced product and online are all areas of tight focus for our community. We especially like exploring products people might never consider offering in a newsagency.
It’s hard work every day. It’s what we signed up for, all of us in retail and in this channel.
It’s nice talking about the local Aussie newsagency as a hub in the local community. It warms the heart. Aww.
I can’t think of a community hub that is commercially successful, and commercial success matters since owning a newsagency is a commercial pursuit above a community activity.
Profit matters, every day. Profit is what pays people, pays off your loan(s), pays suppliers, puts food on your table, educates your kids and gives you a nest egg for future happiness and comfort.
A community hub is likely not as focussed on profit as those who rely on your business might like.
The newsagency as a community hub spin is put about in the media and at some newsagency channel functions because it is an easily understood feel good. It’s not practical tho. In fact, I think pitching the local Aussie newsagency as a community hub is ignorant and lazy. In recent months I have heard a few people who are not newsagents themselves make the pitch, because they want the feel good story some in the media unquestioningly publish.
I heard a supplier representative make the community hub pitch – a supplier that sets newsagent margin way too low and themselves not respecting what we bring to the table.
I heard a representative of an association talk up newsagents as a hub of the community when asked about the future of the Australian newsagency. They had nothing else to offer other than the cliche.
Our channel deserves better than this.
The best local Aussie newsagency is one focussed on profitability, a business with a plan for growth in new shoppers, deeper baskets and above average gross profit percentage. It’s a commercial business that puts the needs of the business and those who rely on it ahead of any local community needs.
Now, none of this suggests you should not be engaged with your local community. Of course you should be engaged. But, community engagement is not your reason for being in business. You’re in business for the financial reward, as everyone who relies on your business for income will / should want.
The type of community engagement that could work is hosting a community noticeboard, supporting local community organisations and being seen out in the community.
One type of community engagement that I think is a waste of time and money is being the retailer of last resort by stocking items that no one else in town carries. The only stock you should carry is that which is profitable for you to carry. Another type of community service that I think is a waste is opening for more hours than is commercially sensible.
Every decision you make in and for your retail business should be in pursuit of maximising the profitability of the business as that profitability is the foundation of the value derive from the business each day and when you decide to sell. Seeing your business as a community hub first and foremost most likely denies you the opportunity if maximising profit.
Here’s a quick video I did yesterday morning showing why it’s wrong to overthink your website when planning for it. I see too many retailers, including newsagents, overthink their website, wanting everything to be perfect, thinking they know exactly what people will buy.
We created www.hugsandlove.com.au for one of my own shops in suburban Melbourne. It took less than two weeks to go from idea to being live. We’ve spent nothing on marketing and we have quadrupled the product range since launch. We have been deliberately frugal in our investment in the website and lazy in terms of chasing sales – to show others what they could achieve even being time poor.
Also, we did not add any tech skills to the business to make the website happen.
In this video I step you through some of the transactions and explain how seeing these helped us evolve the website. I hope some find it useful.
How you approach creating and running a website for your shop is 100% up to you. This video is my experience for this website and this shop. It’s one of ten websites we have created over the years for my shops. Again, the goal was to mirror something any newsagent could do.
We are at a point in retail where having a website for your business is as essential as having a fax machine was decades ago – every business had one.
As I note in the video, this quick and dirty website of ours for this suburban shop will add $50,000 in retail sales in the first year. I can see that doubling the next year with small effort. $50,000 in sales is close to $25,000 in GP, for no additional labour or retail space overhead. That’s good for business. Double it and you’re at $50,000 hitting the bottom line profit of the business.
These results are coming from shoppers the business cannot easily reach by opening the front door of the shop. Every retailer would be happy for this type of growth on top of what the physical shop is achieving.
I know of newsagents doing hundreds of thousands of dollars a year online. This is the financial opportunity anyone can chase. It starts with your first website and leaning into what it shows you.
I am hosting a free workshop on Zoom for anyone considering a website for their business. We’ll explore keyword data and what it means for website traffic generation. We’ll also look at different websites newsagents have for their business. Anyone is welcome. It’s not a sales pitch, nor is it newsagency software specific. Information shared will be useful for you to action right away. I will also cover some of my 0wn website failures and what they taught me.
Join me in a chat with Ravi as he shares us his journey from engineer in India to flourishing retailer in Launceston Tasmania.
Ravi’s newsagency at Prospect Marketplace near Launceston Tasmania looks nothing like a newsagency. This is a wonderful and inspiring business transformation that has locals loving shopping there.
It is a true treasure hunt retail experience, offering shoppers of all ages fun and inspiring engagement opportunities.
What Ravi has achieved in what was a traditional retail newsagency is an inspiration to other newsagents. He’s done it on a tight budget, using items bought at markets and elsewhere to bring character and warmth to his shop.
I love seeing retail transformations like this and are grateful for the opportunity to share.
I was in Ravi’s shop yesterday, September 30. It’s close to four months since I was last there. As Ravi and I discuss in the video he has made the changes on a tight budget.
The customers are loving what he has created, as I got to see for myself when in the shop.
This very rough sketch from me depicts a typical local small business newsagency layout, a design often encouraged by The Lottery Corporation, newspaper publishers, and magazine, card, and stationery companies. The focus always was on providing ample space for each supplier, with little consideration for the needs of the business paying for the shopfit.
The result was a zoned business that was inflexible and primarily served the suppliers’ interests. Too many newsagents today continue to operate with similar layouts, despite their inherent inefficiencies.
The bold colours represent high-traffic product categories, such as lottery, magazines, and newspapers. However, analysis shows that customers in these categories rarely purchase other products. For example, around 80% of newspaper purchases do not include any other product based on the mst recent newsagency sales basket analysis.
The current traditional local small business newsagency shop layout actually discourages efficiency, particularly for lottery products, which often demand a prominent front-of-store location. This can hinder the sale of other products.
The red, blue, and yellow lines represent the typical customer journey through a traditional newsagency. These lines illustrate the inefficiencies and lost opportunities in such a layout.
The failure to adapt to changing times is a significant reason for the closure of many local small business newsagencies in Australia. It’s time for the industry to embrace change and move away from outdated business models.
In 2009, I proposed a flexible newsagency design that could be easily adapted to evolving needs. Unfortunately, many businesses have continued to cling to traditional layouts, leading to financial losses.
It’s crucial for newsagents to push back against suppliers who demand excessive space or prime locations. These demands should be based on sound commercial reasons, not simply the supplier’s desires.
By analysing foot traffic patterns and customer behaviour, newsagents can identify opportunities to improve their layouts and increase sales. It’s time to modernise and adapt to the changing needs of customers.
Here are five steps I recommend for creating a more commercially viable use of your space:
Remove newspaper and magazine specific fixtures from the floor of the shop.
Use everyday (low cost) and non product specific fixtures for newspapers and magazines on the back wall of the shop.
In the freed up floor space introduce tables, desks or similar everyday found objects onto which you place gifts in a storytelling mode. Displays should have few of each item and they should be arranged to represent a story around a theme. Open up the space in such a way that people are drawn further into the shop.
Remove all convenience lines from your counter and replace them with products people will purchase on impulse, products people don’t think of you as carrying and products for which you’d like to me known.
Look at your stock. Urgently get rid of any product you gave not sold at all in the last six months. Dead stock kills businesses. It really does. If you have had a products on the shelves for not sold any of it for six months that is dead cash, dead space and a measurable opportunity cost for the business.
These 5 recommended steps are to get you started. The list for transforming your newsagency from traditional to relevant is long, much longer than 5 steps. Most of the steps will be unique to your business: the place from which you start, your desired destination, your location and your resources. Changes are needed daily.
Transforming a traditional newsagency can be done. There are plenty in the channel who will help. My details are: mark@newsxpress.com.au and 0418 321 338.
It doesn’t matter how traditional your local small business newsagency is, how big or small your shop is, whether you’re in the city or country or how little you have in resources. There are always steps to a brighter future you can take.
This blog post has enough advice anyone can act on without having to pay for anything. That’s a reason I started the blog and continue to write here – to provide a free resource for local small business newsagents in Australia they can consider and act on if they consider it appropriate for their business.
The advice I have provided is advice I have followed myself in businesses I have purchased that were traditional at the time of purchase. The 5 steps are basic, and they work.
Here’s a short video from me exploring this quote from Helen Dowling, CEO of Newspower, in an article published at www.realcommercial.com.au.
Newsagents are the hub of a community. And that’s a great word to keep in mind – community. For a lot of small towns, the newsagency is a one stop shop, so it’s all about what they can offer their community that’s not there already.
I disagree with Helen, as I explain here:
The purpose of every newsagency business is different. The notion of us all being the same and having the same focus is old-school. Years ago, when newsagents were primarily agents, being a hub in the community made sense. Following deregulation and the dilution of the value of being an agent, the commercial value of being a community hub, too, diluted.
What is the future of the local Aussie newsagency? It’s bright for those who look beyond tradition and embrace change.
Thinking of yourself as a community hub feels to me too limiting, out of date and not commercially focussed.
I am glad this quote from me made it into the article:
There are newsagents in regional Australia making up to $500,000 a year selling gifts and homewares. They still do the legacy stuff, but their real interest as retailers is in non-newsagency items. That’s where the future lies.
As I cover in the video I shot this morning, our channel is different to the past. People need to realise that, including plenty who serve within the newsagency channel. Look ahead people.
…
I own and run newsXpress, a marketing group that competes with Newspower. Like everything I post here, this post reflects my opinion.
It’s no secret that the newsagency of 2024 looks nothing like it did 20 years ago.
With over-the-counter newspaper sales declining at a rate of 11% year on year, many traditional newsagents have evolved into convenience-based businesses, which has afforded owners the opportunity to embrace a wider choice of revenue streams.
A 2024 IBISWorld report revealed that of the industry’s $2.2 billion in annual revenue, 21.5% of sales can be attributed to books, 20.5% to newspapers and magazines, 16.9% to stationery, cards and gifts, and 12.9% to lotteries.
According to the intelligence organisation’s data, the remaining 28.2% of sales are listed as ‘other goods and services.’
Mark Fletcher, CEO of Tower Systems – a company that supplies software to specialty local retailers – said newsagents have the potential to thrive in the digital age by not seeing themselves solely as newsagents.
“I know of businesses that have opened cafes, while others have gone into garden centre products. I know of a newsagency in Victoria that created a baby shop within their business and are now going gangbusters in that space.”
“By all means sell papers and magazines, sell lottery tickets, but don’t let those things define you,” Mr Fletcher explained.
“There are newsagents in regional Australia making up to $500,000 a year selling gifts and homewares. They still do the legacy stuff, but their real interest as retailers is in non-newsagency items. That’s where the future lies.”
…
Last month, ABC News published a story on the Mansfield Newsagency in regional Victoria and its failed attempts to find a buyer.
“Unfortunately, it’s an industry nobody wants to take on anymore,” owner Frank Livingstone told the ABC, blaming the decline of his business on the demand for online news outstripping print media.
It’s something Mark Fletcher vehemently disagrees with.
“You can’t blame the decline in print for newsagencies closing,” Fletcher posted on his blog after the article was published. “A business closing because of this is a business rooted in the past. Smart newsagents started transforming their businesses 20 years ago.”
While the official number of newsagency retailers is difficult to pin down, IBISWorld currently quotes a figure of 1,784, while software supplier Tower Systems believes the number is somewhere closer to 2,800.
It’s good to see a better balanced view on this than copvered recently by the ABC and some others.
Here’s what the Newspower CEO said:
“Newsagents are the hub of a community. And that’s a great word to keep in mind – community. For a lot of small towns, the newsagency is a one stop shop, so it’s all about what they can offer their community that’s not there already.”
I think Helen is wrong. Every newsagency in Australia is a commercial business and ought be run as one. Profitability has to be the priority ahead of any community service as it is only profitability that will give the business a future and the owners what they need / want from their business.
I think Helen’s quote shows where Newspaper is at today. It reminds me of the Jethro Tull song, Living In The Past.
Over the last three days in Melbourne newsXpress members met in Melbourne to discuss the future, explore opportunities and connect face to face.
There were insightful and inspiring supplier presentations, taking us behind the scenes with invaluable data insights, and there were plenty of attendee driven discussions about business, and especially new customer traffic opportunities.
With hotel accommodation, meals and drinks covered by newsXpress thanks to wonderful supplier support, the cost of participation was minimal for newsagents from Western Australia, Queensland, New South Wales, the ACT, Tasmania, South Australia and Victoria.
We discussed the economy, our channel, current retail sales data nationally and for the channel, what’s working, what’s not, opportunities for the rest of 2024 and into 2025 as well as entirely new product category opportunities.
Tuesday rounded out the conference with round table discussion on: getting online (how to, cost, tips, opportunities); your exit strategy – how to plan for a good exit for you, your family and your business; and, chasing margin dollars – how to avoid too many newsagents make in chasing the wrong thing when negotiating.
Over the course of the two days, plenty of meals, drinks events, morning and afternoon team breaks and the conference sessions themselves, everyone was engaged and involved, working on their businesses, taking the opportunity of being outside of the business to do this and plan for what’s next.
It was a relaxed conference, not too formal, with plenty of laughs along the way.
Alongside the conference was a terrific trade show with products from twenty different suppliers. Suppliers were thrilled with the results, which new accounts and business written. This business happened naturally, without pressure.
But let’s get back to exit strategy. Each speaker spoke to this topic, with their own stories and newsXpress added context for lcoal retailers in terms of the day to day decisions that can provide useful opportunities when one does decide it is time to exit the business.
There aren’t many national conferences for newsagents any more. For 30 or 40 at this newsXpress conference it was their first with the group. The feedback was terrific, people found attending invaluable personally and they look forward yto implementing initiatives to make it valuable for the business.
If your business is in a group, go to their national conference, engage, ask questions, network. Those few days out of the business thinking about the business and working on it can be invaluable as this week has proven for plenty at the newsXpress conference.
This photograph captures the second location of my first newsagency in Forest Hill, Victoria. I acquired the business in February 1996 after the previous owner went broke. We moved because the landlord required us to relocate a few months after buying the business. This new location reflects the focus at the time on the newsagency shingle and using newspapers to attract shoppers.
The shop’s retail floor space was traditionally divided into thirds: one for papers and magazines, one for stationery, and one for cards.
We operated from this location for three years before being relocated to a new site in 1999, where we added Tatts lottery to the business.
In 2006, we sold the home delivery run—for the same price I had originally paid for the entire business—and six years later, we sold the entire business.
In the twenty-eight years since I bought my first newsagency things have changed considerably. I think, right now, the pace of change is faster that ever. I also think any are not noticing the changes.
I don’t recognise the business in the photo. It is so out of date in terms of what I consider a newsagency to be today.
None of my shops today have lotteries. Cards are allocated 20% of the floor space, magazines under 10% with the rest being taken by gifts, homewares, collectibles, books and other good margin products.
It’s valuable to look back and reflect on the journey from this perspective.
Two significant coin releases yesterday from the Royal Australian Mint provided a terrific traffic boost for newsagents with stock. Both the silver proof and decorative Festive Florals coins sold quickly, and well.
What’s beneficial about coin shoppers is that they typically purchase other items during the visit – around 70% of the time they do from our data. This makes coins an efficient product for us to stock.
This second coin, the silver proof, is another example of price not being a barrier. It sold out first with little concern opver the 4135.00 price tag.
Key to leveraging the customer visit is related products that will appeal to this shopper, that the shopper can include a coin collector, a Christmas seasonal buyer, a general collector or anyone buying for any of these. Irt takes a it to understand the various shopper personas. Once you do understand, you can make good coin. (Sorry about that!).
Five years ago newsagents (except for Post Offices) would not have had access to mint coins. Now, four mints supply products to the channel, delivering millions of dollars in revenue and more than this in terms of value of new shopper traffic.
Coins are a valuable opportunity and that value will grow into 2025 and beyond.
I asked an AI platform what the future of newsagents is? While the decline of print media has posed significant challenges, many newsagents have adapted and diversified their offerings to remain competitive.
Here’s a 22 minute video shot this morning in which I discuss this:
Pre Covid I used to host Newsagency of the Future workshops around the country, meeting hundreds of newsagents, looking at trends impacting our channel and speculating on what our future could look like.
This session next Tuesday will look at where newsagencies are at today, consider trends in the world that impact retail broadly and our channel specifically and contemplate what a Newsagency of the Future could look like. I’ll offer actionable practical steps for today.
This is a free session. Anyone is welcome to join live. I will share the video.
My goal for hosting this session as it has been for similar sessions I have hosted for many years is to offer newsagents ways they can enhance the relevance of their businesses, the enjoyment they derive from their businesses and the value their businesses bring them and those who rely on the business for economic sustenance.
The latest issue of Channel magazIne published by ALNA includes a four-page spread on Transforming Your Newsagency. I am grateful to ALNA for publishing my article. Click here for a copy of the article. I urge newsagents to read it as the article contains advice anyone can act on today without spending any money.
ABC News recently ran a story suggesting the future of the local Australian newsagency was in trouble because it had not kept up with the times. I know of many local Aussie newsagencies that have kept up and are more relevant today than any time in their past.
This video I made showcases a few of these awesome local businesses, shops that look nothing like the old Aussie Newsagency. I made it, and others to follow, to show that the local Aussie newsagency may not be what you think it is.
These newsagencies offer products outside of what the old Aussie newsagency carried. Gifts feature along with clothing, handbags, gourmet cooking items and more. These are businesses serving a diverse mix of shoppers – far away from lottery, newspaper and magazine customers.
Smart newsagents started transforming their businesses 20 years ago. Moving into gifts, homewares, toys and more – attracting new shoppers and selling products at margins four and five times more than newspapers.
The easiest local newsagency to transform today is one in a small country town. This setting presents opportunity, and I am glad to say that many newsagents have embraced it.
This is the story ABC News should be covering, a story of a channel navigating extraordinary change with plenty of local retailers, local newsagents, evolving their businesses to be relevant, vibrate and valuable.
We made the video because we know a picture is worth more than a thousand words. This video is worth thousands of words showing off transformed local Aussie newsagencies that aren’t newsagencies in the historic sense of that label.
While news outlets and suppliers consider newsagents a channel, newsagents are not a channel and have not been for many years. You can’t go into a newsagency expecting they will have what you want if your expectation is rooted in decades ago.
I don’t think the shingle matters. What matters is what shoppers feel when they enter a retail businesses. If they step into a shop that nurtures a feeling of comfort and happiness and offers them a treasure hunt retail experience they will tell others, and they will come back. The shingle above the door is irrelevant.
My Tower Systems business is a small business focussed POS software company developing, and supporting POS software for niche specialty retailers, like newsagents.
I am are grateful that Tower serves close to 1,800 newsagencies with our industry-standard newsagency software. This helps Mme do this advocacy work for our channel.
“A typical country town newsagency today should be making less than 10% of their turnover from print media products, 30% of revenue from lottery commission and 60% from gifts, homewares, books, toys and more. That is, 60% of revenue from items delivering 50% and more gross profit.”
Fletcher has long been a critic of the support newsagencies received from publishers over the years. But he notes it should not be the reason for a failing business.
“You can’t blame the decline in print for newsagencies closing. Newsagents make a paltry margin from print products. It’s disrespectful, and embarrassing how little we make. A business closing because of this is a business rooted in the past.
“Smart newsagents started transforming their businesses 20 years ago.”
Fletcher finished with a final blast for ABC News:
“If the folks at ABC News did even basic research about the future of Australian newsagencies they could have provided more accurate reporting on the state of newsagency businesses in Australia.
“Do better ABC News.”
I am thankful to get this support for the channel out there compared to the reported comments by Brendan Tohill from VANA. Sheesh.
Let’s take a moment to look at the performance of print media products in our shops and for our channel.
Newspapers.
Newsagents make between 10% and 12.5% of the cover price. For the Herald Sun Monday to Friday, that’s .375 cents a copy. @ 50 copies a day, that’s $18.75. Considering the weekend cover price and sales, a medium size newsagency, selling 50 copies of the title each day will make under $7,000 a year in gross profit. Labour cost for managing the title over the year in that size business will be at least $4,500 while retail space will cost at least $2,000 without considering a premium for better positioning in-store.
Newspapers remain inefficient products. Around 75% of newspaper purchases are a single newspaper. I know this because of basket analysis for hundreds of newsagencies over many years. No amount of in-store effort has been successful in changing the basket efficiency of newsagencies.
Magazines.
Newsagents make 25% of the cover price. Thanks to cover price suppression of major titles, in real terms we make less today than five years ago.
In an average size newsagency selling $80,000 worth of magazines a year, gross profit is $20,000.00. Labour cost for the year managing magazines is $12,000.00. That can balloon out if there in an increase in missed deliveries. Theft of magazines costs around $2,000 a year, which lands at net $1,500.00. (My understanding is that supermarkets do not cover the cost of magazine theft.) magazine space in this average newsagency costs around $15,000.00. This average newsagency is losing money on magazines.
Magazines are more efficient than newspapers with single product baskets accounting for only 40% of all baskets.
Traffic generators.
For more than five years, print media products have not been valuable traffic generators for newsagents. While for sure that are people buying the daily paper or their weekly magazines, those shoppers are not the valuable shoppers that make money for newsagents. Indeed, thanks to basket analysis and tracking loyalty offer engagement, magazines especially are the impulse purchase if a shopper has bonus loyalty dollars to spend.
Print media suppliers don’t understand.
Our print media suppliers have management practices that are out of date, rooted in the days when our channel was tightly regulated. These poor practices cost us money. They think their products drive valuable traffic for us. They don’t. They think they make good money for us. They don’t.
Print media does matter tho.
What we don’t know is the value of print media customers who, on other visits, purchase other items from our shops. There is anecdotal evidence, but nothing you could rely on in court. The may to make the category work is to tightly manage space and hope that suppliers lift their game and drag their data management processes into 2024.
Why plenty of newsagents are thriving.
Many newsagents have transitioned their businesses to sell high end gifts, sought after collectibles and other products people will drive and hour or two to source. We have newsagents doing well with books and others doing well with coffee. Many newsagents have websites that reach people way beyond their local area. Some, too, with websites that have nothing to do with their newsagency businesses.
The shingle.
While news outlets and suppliers consider us a channel, we’re not a channel and have not been for many years. You can’t go into a newsagency expecting they will have what you want if your expectation is rooted in decades ago.
I don’t think the shingle matters. What matters is what shoppers feel when they enter your businesses. If they step into a shop that nurtures a feeling of comfort and happiness and offers them a treasure hunt retail experience they will tell others, and they will come back. The shingle above the door is irrelevant.
This is what’s interesting abut plenty of newsagents today. They are retailers, not agents, not shopkeepers. This is what the poor reporting of the ABC neglected.
Here, again, are videos I have done with the owners of three newsagencies that are anything but traditional newsagency businesses. Each business is inspiring:
The Aussie newsagency has as bright a future as each newsagency business owner allows.
It’s a headline from ABC news today to get attention. The story fails to adequately report on the state of Australian newsagencies.
While there have been newsagency closures, the numbers are not huge, not as big as we have seen in some other retail channels.
The ABC News story fails to properly investigate why there have been closures. Instead, they publish the cliche of the decline in print media as the cause, which it is not.
The ABC News story quoted someone from IBISWorld and while he has some data that is interesting, numbers don’t tell the story. For example, he offered no number about newsagency businesses that have transitioned into other retail such that the newsagency part of the business is minor.
The ABC News story quoted Brendan Tohill, CEO of the National Lotteries Newsagents Association and Victorian Authorised Newsagents Association. I don’t consider Brendan to be in a position to offer insights – remember their News bar chocolate product launch last year that was going to bring people into shops?
Anyway, Brendan talked the channel down saying newsagencies are now a:
last-minute gift store underpinned by lotteries.
That’s what we are now. That’s what it is.
Shame on ABC News for running this quote. It plays into the narrative that our channel is not relevant and has not kept up. It’s an ignorant quote enemy opinion, something not supported by evidence from plenty of businesses in our channel.
I feel for the folks at Mansfield Newsagency. It was a nice shop in a beautiful country town with a population close to 5,000. The shop feels like it’s from the 1990s, not today.
As I have written here many times and in emails sent to all newsagents, I’ll help (for free) any newsagent keen to work on transitioning their business from relying on legacy product categories to attracting new shoppers through product categories not common to our channel and in pursuit of growing overall business grows profit and thereby offering insulation to the disruption of change.
I know of country town newsagencies near Mansfield and right around Australia that are thriving, growing. These businesses are not selling last-minute gifts. Some are selling fashion items for $300 apiece and more. Others are selling $500 homewares items. Some are doing $80,000 a year in the best coffee in town. Some are achieving 33% of revenue online selling to people interstate and overseas. Some are selling over $100,000 a year in collectibles.
I know of regional newsagencies doing $250,000 a year in gifts and more, achieving far more in gross profit each year than newspapers and magazines ever delivered combined.
A typical country town newsagency today should be making less than 10% of their turnover from print media products, 30% of revenue from lottery commission and 60% from gifts, homewares, books, toys and more. That is, 60% of revenue from items delivering 50% and more gross profit.
The difference between this type of transformed newsagency business and the traditional newsagency is decisions made by the business owners.
You can’t blame the decline in print for newsagencies closing. Newsagents make a paltry margin from print products. It’s disrespectful, and embarrassing how little we make. A business closing because of this is a business rooted in the past.
Smart newsagents started transforming their businesses 20 years ago. Moving into gifts, homewares, toys and more – attracting new shoppers and selling products at margins four and five times more than newspapers.
The easiest local newsagency to transform today is one in a small country town. This setting presents opportunity, and I am glad to say that many newsagents have embraced it.
This is the story ABC News should be covering, a story of a channel navigating extraordinary change with plenty of local retailers, local newsagents, evolving their businesses to be relevant, vibrate and valuable. It’s also a story that Brendan Tohill could have spoken to.
Here are three videos of discussions I have had in recent months with owners of newsagency businesses thriving:
Each of these business owners should feel proud of what they have done and are doing. Their playing outside the tradition of the Aussie newsagency is inspiring.
If the folks at ABC News did even basic research about the future of Australian newsagencies they could have provided more accurate reporting on the state of newsagency businesses in Australia.
Do better ABC News.
…
Footnote: If you see my earlier blog post from today about one of my own shops closing soon, the closure is because of my decision to focus on high street retail rather than shopping mall retail. My newsagency businesses are thriving outside the shopping mall setting and not renewing the lease allows us to lean further into that.
I am grateful to Shelley and Mark Petersen for the opportunity to discuss their journey from purchasing a traditional newsagency in Sarina, 25 minutes out of Mackay in Queensland and their transformation of the business into a loved gift and homewares destination.
This discussion is a deep dive into how to approach change and thrive in a local retail business in a channel that itself is experiencing considerable change.
Neither Mark or Shelley had experience in this type of business when they bought it in 2001. Today, they are experts because of the experiences they have embraced and continue to embrace.
Their pragmatic approach to business is inspiring. Their success is well deserved. Any retailer watching the video will discover how they can evolve their business in ways Shelley and Mark have.
newsXpress Sarina is seen by plenty as a newsagency and Post Office. While it is those things, it is primarily known in Sarina as the place to shop for gifts and things that will surprise. It’s a business of which Shelley and Mark can be proud.
For context, Sarina has a population of around 6,000. I mention this as there are newsagents I have spoken with in bigger towns who think they don’t have enough population.
Any newsagent can embrace the scope of change reflected in the video. It starts with that first step. If it works, do more of it. if it does to work, take a different step.
Use of the self checkout POS software terminal we have setup in one of my newsagencies continues to grow. Without any encouragement shoppers are happily scanning purchases and paying.
The mix of products continues to surprise: cards, gifts and stationery with the odd magazine or newspaper. Prior to installation we expected it to be used primarily for papers and magazines. We also expected it to be for single purchase transactions. Most transactions are two items and even more. Average transaction value is $25+.
We installed the self checkout terminal as a trial for my POS software company, to play with new tech. It was not installed for a newsagency specific reason.
My interest was to see if shoppers in an independent local retail business might use self checkout. Sure, we are wired to use these types of terminals in the major supermarkets. It’s rare in independent local retail businesses. So for our trial we needed to install the tech without fanfare or encouragement, to see how shoppers behave.
The $4,400 hardware and software solution is a lower cost than what the major supermarkets install. It’s a smaller footprint too.
I know from research that shoppers are turned off by self checkout POS software that is hard to navigate. We have made sure this is simple. The in-store experience has shown this to be the case. People of all ages are engaging. There is no tech barrier like we wondered there might have been.
A factor I had not considered that much is that there are shoppers who like a more private transaction of business. Self checkout works for them.
The supermarkets have crashed through with this tech and educated people to embrace it. This certainly does make it easier for local small business retailers to embrace if it is right for their own businesses. There is less pushback than would have been the case five years ago.
Tower Systems released its self checkout solution last year. It was developed for other retailers. Now, based on the experience in my own newsagency, we will keep the terminal. It is playing a good role in the business.
newsXpress Mount Waverley is a corporate store, it’s one of our own shops where we experiment with tech and retail. It’s a shop we run on a tight budget.
In this video, Anthony from our newsXpress head office and Mark Fletcher our CEO discuss the transformation of the Mount Waverley business from 2018 to today. We also cover how this business spawned a second business, and online business, that outgrew the shop, and how it’s just launched its second online business – www.hugsandlove.com.au.
While the business identifies as a newsagency, it’s far removed from what Aussies consider to be a newsagency. It’s a gift shop, a haven for collectors and a place to shop for young kids.
This video shows how to go about changing a local high street shop on a small budget and the importance of being flexible to pivot when the world presents opportunities.
I am grateful for the opportunity to take you behind the scenes of one of our corporate stores, to show the value we harvest from being a POS software company that owns and runs retail businesses.
