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.
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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.”
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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.
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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.
The first 3 metres of your shop from the front windows and door in represent your headline.
If you want to transform your newsagency and have people see your business as changed, change this space, dramatically, completely. Leave nothing as it was.
It’s this first 3 metres people will see and decide the type of shop you have. This is where you get to play against expectations, it is where you have to disrupt. Don’t give them what they expect.
Products, fixtures – they are all up for grabs in terms of the changes you bring.
If your counter is located in this space, it needs the same dramatic attention.
I think the best way to do this is one day when the shops is closed, take everything away from the first 3 metres, remove it so you have a blank slate. Set a rule for yourself that you cannot put back into the space anything that was there. It will be difficult. You’ll have the urge to put oe thing back into the space, then another. Resist this urge.
What you really want from the experience is for customers to tell you there are surprised to see you stock something you always have stocked but that they only notice now because of what you have done in the first 3 metres of the shop.
Here are four principles for making the first 3 metres of your shop work:
Declutter and Create a Visual Feast: As you place new products, keep the entrance free from clutter. Make it visually appealing. Try and not use traditional retail fixtures. Use clean lines, captivating displays, and well-maintained fixtures.
Sensory Experience: Consider incorporating subtle elements that engage other senses. Play upbeat music at the front of the shop – music people will know, showcase beautifully scented products, let people smell your type of business and enjoy it.
Storytelling Through Displays: Don’t just display products, tell a story. Create thematic displays that showcase how your products can be used or benefit the customer. Don’t have too many of an item in a display. Show less quantity but more range of products – to tell that story you want.
Interactive Elements: Make it easy for people to engage with what you sell, to touch and smell. Having products on display in a box of so old school. Take products out. Encourage touching and engaging.
The first 3 metres of the shop is the most valuable retail real estate in the shop if you make good use of it. Be in charge. Set the tone. Make a statement. Keep changing it. Show that yours is a transforming business.
If you know you need / want to transform your newsagency and your business data is not in good shape, there are steps you can take on the shop floor to drive change in the business.
In my experience, businesses often in this situation often have a traditional shop floor layout.
The advice I provide below is all about disrupting what you have as I have found this can help retailers see what they could see. It’s radical and rough, designed to seriously change things up in the business.
It is important to know that whatever you do is forever. Make these moves, watch, learn and adjust. Shops needs to be continuously evolving.
First: the old newspaper and magazine unit
If you have a traditional magazine fixture running down the business of the business with newspapers on the front facing shoppers and they enter the business: take all the stock off and rip it out. Don’t overthink it, rip it out.
This is prime retail space you should be using for products with 50% gross profit and more. Giving this space to products from which you make 25% GP and less is a bad business move.
Rip the whole unit out.
Now, using low cost basic everyday shelving, put your magazines on the back wall of the shop. What ever was in that spot needs to go somewhere else.
Basic strip shelving with brackets that hold the shelves will suffice.
Put your newspapers below, on a bottom flat shelf.
If you’ve ben putting out newspaper or magazine posters, stop. They do not increase sales.
Second: fill the freed up space.
Grab a couple of old tables, or some old wooden boxes. Create display places on the shop floor and on each tell a product category story. Bring products to this part of the shop that people might otherwise not have seen.
If you don’t have tables, look at a local op. shop, in your garage or somewhere like Amart. Spend as little as possible.
Resist using spinners here in this recovered space.
Choose products you are proud to offer.
Be sure to include products you are certain would not work for your customers – it’s important you do this to figure out what you don’t know about your customers.
Be prepared to change the displays within a week if they are not working for you.
Three: watch what happens.
The moves may be a bust. It’s okay if they are, make more changes and keep doing so until you see a good result.
You may see some early success. If you do, lean into that, do more.
If your business is that traditional that it has an old magazine and newspaper unit running down the middle of the shop, I suspect you will experience good news for that’s what I have seen in every business I have seen try it.
Have fun.
One newsagent I know who made these moves hosted a Saturday afternoon sausage sizzle so people would watch as they used a chain saw to exorcise the old magazine unit from the shop.
The key point of this first move is to disrupt your view of the business. Sure, the shop floor will be disrupted. You need to be disrupted more and that’s why you need to do something radical that you are likely to want to resist. The suggested changes could do more for you personally than the business itself.
If you want to change your retail newsagency business, no matter whether it is a traditional newsagency or one that has already seen some transformation, it starts with being sure of where you are at, it starts with your data.
Knowing where the business is at is the foundation of steps forward. This involves looking at the business from a range of angles.
Up to date profit and loss statement.
A current debtors report and a current creditors report.
A list of all monies owed by the business, both formal and informal.
Stock listing showing total value of stock.
Dead stock listing showing all items for which zero sales have been recorded in six months or more – showing the total value of this stock.
A floor map showing gross profit percentage contribution by product department / category floorspace allocation.
Total rostered hours in a week, including owners regardless of whether they are paid, and a calculation on revenue per hour.
a revenue comparison down to the category level comparing the most recent 6 months with the same 6 months a year earlier.
It’s not enough to say you want to transform your business, you need to understand where you are at and the capacity for change. The above information will provide insights as to immediate opportunities as well as the capacity of the business to fund the cost of change. This list is the starting point of what I ask for from any business I work with on transformation.
In looking through the pool of data from this list, my recommendation is to seek our easy wins that can set up for productive focus next. For example, if there is $10,000 or more in dead stock and all of that stock has long since been paid for, quit it. The freed cash and space will give you a boost. Now, to quit the stock, place it in one location, a clearance location. It could be a table, or two or more. Put it together with the same discount for all. My suggestion is 50%.
While you are quitting dead stock, work through the rest of the data to understand the business performance as it stands today and look at the comparison report for any easy green shoot opportunities you can see allied to current business categories. This could provide you with an easy first step.
As you work through your data, make a list of ideas, action items. It could be that on that list there are some easy wins you’d not seen before or had been ignoring.
Some retailers I have spoken with over the years about business transformation or improvement have been tempted to use their accountant to guide them. I think this is a mistake unless the accountant has current hands-on retail experience in your type of shop. Others have been keen to use a business consultant. Unless they have current retail experience in your area, I’d not engage with them.
My point here is that it’s your business. You are at a point of wanting change, transformation. The next steps are up to you and best done by you so that you own the changes.
This first step starts with gathering the data, cleaning house and getting fit.
All of this work is about getting you match fit for more considerable change, that comes next.
Footnote: I’ve owned newsagencies since 1996. I’ve been a Director of newsXpress since 2005. I started Tower Systems in 1981. While I am no guru, I have had a range of experiences that have helped me see the value of changing our businesses, transforming them beyond the traditional and doing so on a minimal budget. If you are embarking on the transformation and what to talk to someone, I’m here: mark@towersystems.com.au or 0418 321 338.
The future of the Australian newsagency channel is in the hands of those who own and run the 2,800 or so retail businesses that make up the channel. The decisions they each make in each of their businesses determine the success, or otherwise, of those businesses, and of the channel.
The decisions that will matter most are those relating to theproductscarried in the business, thenarrativeof the business andhowyou sell.
Before I get to that, I can say the future of the Australian newsagency will not be found in newspapers, magazines, lotteries, convenience retail, tobacco, cheap gifts, cheap toys or a canyon of spinners of products with names on them. The future of the Australian newsagency will not be found in any type of business competing with discount variety.
Suppliers, too, will not play in the future of the Australian newsagency. Despite them creating our channel, print media businesses especially have no interest in our future.
We can already see from retailers, newsagents, in the space that across Australia there is value to harvest from playing in premium and unique spaces, worrying less about price point and being smart when it comes to deciding your margin. Equally, there is value in the adagefind a need and fill itin evolving our local businesses.
Byproducts, I am particularly interested in products not common to the newsagency channel. Products such as clothing, gifts at $300.00 and more in price, books but not remainder books, cookware, collectibles people will drive for. Most likely products suppliers would not have in our channel today.
Sure, everyday products such as stationery, greeting cards and other categories our channel is known for will play a role in the future. Their success will depend on how smart we are in what we carry and how we price the burden of carrying. For example, selling stationery to those who need it is easy, selling to those who love is a whole different opportunity – one that is worth more I think.
There are no borders, rules or boundaries. What you can sell is up to you and your imagination as to how it is pitch.
BynarrativeI mean the story of the business the why for someone considering the business. If you’re a shopkeeper, you put products on the shelves. If you are a retailer with a commitment to a narrative, customers will understand the business, love being in the business and want what you offer because the narrative will nurture trust.
You nurture your narrative through what products you carry, how you place them in store, how you pitch them on social media, on your website and how personal you yourself are in and with them.
The challenge with narrative is that it must evolve, with you, time and the community.
Byhow, I mean when you sell and where you sell … having an ability to sell online is the key here. If you’re not online, you will have no idea what you don’t know.
Now if this all feels a bit new age like, I don’t mean it to. Today, in May 2024, we are in the midst of a period of immersive retail, retail people feel and experience. This is where your narrative plays a difference. A writing pad in a basic newsagency is a writing pad. The same writing pad in a store with a strong narrative could sell more easily and for more.
The more your shop and your website help people to feel things, the greater the success you will have.
What I am getting at here is that the future of the Australian newsagency lies in us being smart, engaged and creative, each of us making our own shop the best it can be. It won’t look like a cohesive channel, and that does not matters. What matters is that you create a business that is mighty successful locally, and with online shoppers who find you.
To those who don’t act, who don’t embrace change, I say farewell. The days of the old school newsagency are over. Time will catch you. This will result in fewer rooftops in our channel. I’m not sure how many, but on the current trend it will be 150 – 200 in the next 12 months.
To those keen to act, there are plenty of us in the channel who will help where we can. Reach out. Together we can ensure the relevance and success of our vital local retail businesses no matter how diverse our product and service mix and no matter what we call ourselves.
Footnote: There will be some who say the shingle should change, that news is not relevant. While it’s not relevant, what you call the shop does not matter all that much. It’s kind of like a picture versus a thousand words. What a shop shows itself as being matters more than what a shop calls itself. That said, Aussie newsagencies, being quintessentially local businesses are, in my opinions best off being called a name that is locally relevant – rather than some national name that is not locally relevant.
Second footnote: Reading back what I have written I know I have not made a clear and solid prediction. That’s because I can’t. There is no channel, no way to determine what all businesses in the channel will do.
Aussie newsagency businesses were designated essential early in the Covid pandemic lockdowns implemented in the states and territories of Australia. This meant newsagencies could open while many retailers around then had to remain closed. This reacquainted many Aussies with their local newsagency.
Plenty of newsagents leant into the lockdown opportunity, expanding what they sold beyond what until then had been traditional for newsagencies. While gifts and similar products were common among those who expanded the range of products in their newsagencies, other new categories appearing in some businesses own the channel included flowers, coffee, electrical goods, clothing and camping goods.
While retail had the physical challenges of social distancing in this time, there were also considerable supply chain challenges as well as new operational models to learn such as selling online, click and collect and making as much of the in -store experience as contactless as possible.
Plenty of suppliers who had previously not engaged with the newsagency channel as they did not consider it appropriate to them engaged during the lockdown years. The expanded the range of products forward-leaning newsagents could easily access for their businesses.
As a result of the lockdowns, newsagents and suppliers found other ways of connecting and doing business. Trade shows that had been a key part of the product sourcing cycle for newsagents proved to not be as important post-lockdown. Retailer attendance at trade shows did not bounce back to pre Covid numbers.
Another situation that emerged post-lockdown is that newsagents relied less on traditional product categories. The commercial interests of newsagents and expanded, there were more opportunities than traditional suppliers offered.
Many newsagency businesses experienced double-digit growth in calendar 2020 over 2019 and 2021 over 2020. While the growth slowed, it did continue in 2022 and into 2023. The newsagency businesses in which growth was not as strong tended to be those that did not embrace the opportunity of being designated essential during the Covid lockdowns.
The good Covid years made newsagency businesses more appealing than they had been. This resulted in more business sales post Covid lockdowns than we were seeing previously.
As 2023 developed even though Australia had fewer newsagency businesses, the businesses themselves were stronger and had better relevance. The Australian newsagency channel was refreshed, well, most of it at least.
There was a surge in newsagency business closures in late 2022 and into 2023. These businesses tended to be those that had not change, that had not embraced changed. With newspaper and magazine sales continuing to decline, foot traffic was lower, unless steps were taken with new product categories to make the business more appealing. While media outlets considered the closure of newsagency businesses newsworthy, newsagents did not as most of those remaining continued to trade well.
Covid change the local Aussie newsagency and local communities benefited.
2015 to 2020, up to the start of the Covid pandemic, were tumultuous for Australian newsagents as suppliers newsagents had served for years in the agency side of the business looked elsewhere for revenue.
What we now know as The Lottery Corporation ramped up selling lottery products online and on mobile devices, achieving excellent growth, taking plenty of in0-store purchases from retailers who continued to invest, under duress, in shook-fit and other requirements.
Newspaper publishers withdrew from newspaper distribution arrangements with newsagents, often delivering a poor substitute and leaving customers of long standing receiving poor service, failing on their promise of a better service for their subscribers.
Newspaper publishers also reduced in real terms the margin retail newsagents make from selling newspapers. What newsagents made did not keep pace with price increases. Also in these years, plenty of local newspapers closed with local news apparently valued less by major publishers.
Plenty of magazines stumbled with Bauer Media doing a poor job running the ACP media business they had purchased in 2012 and with pacific magazines not receiving much love from its owners at Seven West.
Banks no longer valued a newsagency business as an asset against which a purchaser could borrow.
Also during this period of 2015 to early 2020 there was disruption from the migration of accessing news and other traditionally print content to online.
Newsagents themselves remained disorganised with four different associations claiming to represent them.
In the midst of the changes plenty of newsagents realised that they had to make their own success, that suppliers who had led the channel for decades had all but abandoned it.
There was no whole of channel move this way or that. Rather, some moved into book retail, others into outdoors, others into coffee with most significantly expanding their gift and homewares offering.
Initially, the evolution was through a range of everyday gift suppliers who saw the opportunities in the newsagency channel. The focus was on gifts priced at under one hundred dollars and that served the traditional seasons of Valentine’s Day, Easter, Mothers’s Day, Father’s Day and Christmas. Newsagents continued to dominate in card sales for these seasons so tapping into gift related opportunities seemed easy.
The extent and speed of change in newsagency businesses varied business to business. There were many who did not change in these years, and this was a key factor in business closures, which were tracked at around 10% of newsagency rooftops each year in this period.
These years of 2015 through to early 2020 we say the biggest move from the agency model on which the channel was built to pure retail. Success was dependent on newsagents becoming retailers.
By the time 2020 reached us, the Australian newsagency channel was a channel in name only. In reality it was just over 3,000 retail businesses all operating locally, independently, and differently – some thriving, some treading water and some slowly going under. While there were several marketing group trading banners in the marketplace, the consistency between the businesses in these groups was not evident.
If it were not for the arrival of the pandemic early in 2020, the next years for the newsagency channel would have been quite different.
In 2014 I was asked to contribute a chapter for A Companion to the Australian Media, the first comprehensive, authoritative study of Australia’s press, broadcasting and new media sectors. Edited by Bridget Griffen-Foley, this book is loaded with terrific content on the history of the media in Australia.
My contribution was on the history of newsagents. I share it below as part 1 of what I plan to be three posts on The history of the Australian newsagency.
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The first organised newsagency in Australia was created in the 1800s to distribute publications to the Victorian goldfields.
The delivery news agents soon found themselves delivering multiple publications along particular routes, creating the beginnings of the first newsagency businesses. Over time, delivery routes were organised, providing the newsagent covering a defined route with exclusivity by arrangement with publishers.
In the latter part of the 1800s, some newsagents opened retail shops from which to run their distribution businesses. In addition to selling newspapers and magazines, these early retail newsagency businesses also offered stationery.
A traditional newsagency business model evolved, consisting of a retail outlet, distribution of newspapers and magazines to homes and businesses in a defined territory, and the supply of newspapers and magazines on a wholesale basis to other retail outlets. This model was not national: in South Australia and to a certain extent in Western Australia, the distribution and retail businesses evolved separately, making it rare for one business to operate both a retail shop and a distribution business.
The supply of newspapers and magazines to other retailers, called sub-agents, on a wholesale basis was contentious almost from the outset. Early in the 20th century, newspaper publishers took the lead in controlling who could purchase a newsagency and where one could be opened, opening hours, service levels and even what products could be sold. The lever of control was the Newsagency Council, established in each state and made up of publisher representatives.
Central to the newsagency model was that newsagents were – and are today for some suppliers – agents. This meant that they could exert little control over key aspects of their businesses, such as products supplied, quantity of supply and selling price.
Newspaper publishers micro-managed all aspects of their products in a newsagency business, from the time by which they had to be delivered to homes to their placement in the shops. Newsagents accepted this as a cost of having a monopoly.
It was not uncommon, even as late as the 1980s and early 1990s, for publishers to restrict access to ownership of a newsagency based on race. Magazine distributors exerted similar control on the granting of a trading account.
Newsagents were selected as the preferred retail outlet for lottery products and held this position almost exclusively until the 1980s.
A typical newsagency shop for much of the 20th century would have around 30 per cent of floorspace given over to magazines, 30 per cent to greeting cards, 30 per cent to stationery and 10 per cent to newspapers.
As shopping centres evolved in Australia, more newsagents opened retail newsagency businesses inside them. In 1999, through a process overseen by the Australian Competition and Consumer Commission, newsagents lost their monopoly over the distribution of newspapers and magazines. This resulted in other businesses being able to access direct supply of newspapers and magazines. While some publishers maintained newsagents as the last-mile distributor of products, they no longer controlled the relationship. No compensation was offered or paid to newsagents for the loss of the monopoly.
While the distribution of newspapers and magazines was deregulated, pre-deregulation rules and processes have remained for newsagents in relation to the supply of magazines. This has disadvantaged newsagents. In the years since deregulation, the relationship between newsagents and magazine distributors has prevented newsagents from breaking free of the monopoly-protected business model.
Since 1999, distribution and retail newsagency businesses have evolved. The number of newsagencies with a combined retail, home delivery and sub-agent business has significantly fallen as a result. Whereas up to 1990 newsagencies carried a reasonably consistent range of products across a limited number of core categories, in the 1990s some newsagents branched into new areas.
The pace of change in the newsagency channel increased in the mid-2000s, with many newsagents either selling or giving up their newspaper home delivery and sub-agent
distribution businesses. This came about because newspaper publishers refused to allow newsagents to charge a commercial rate for distribution services. Coupled with a static cover price for newspapers, from which newsagents made a margin, this meant the majority of newspaper distribution businesses were loss-making. A limited number of newsagents purchased these businesses, combining them into bigger specialist distribution businesses by leveraging leverage critical mass to make newspaper and magazine distribution profitable.
Since 2011, the pace of change in retail newsagency businesses has increased considerably, driven by declining sales of print media products, increased retail real estate and labour costs, a higher cost of capital and a greater penetration of franchise groups providing newsagents with management and marketing advice.
By 2012, there was a growing separation between distribution newsagencies and retail newsagencies, as well as a growing gulf among retail newsagencies. This was encouraged by News Limited with a trial project called T2020, intended to force newspaper distribution consolidation among newsagents. While T2020 failed to go beyond trial, newspaper publishers continued to encourage newsagents to consolidate to drive operational efficiency.
In 2013, around 7 per cent of retail newsagencies closed, due to a lack of newspaper home delivery revenue and falling newspaper and magazine retail income. Today, while a typical high street newsagency has a floor space similar to that of 30 years ago, the average shopping centre newsagency has a more diverse product offering.
Whereas in 1999 newsagents did not sell printer cartridges, by 2014 they accounted for around 40 per cent of stationery sales. Some product categories, such as toys, have come full circle. Decades ago, newsagents used to dominate in the toys category. This faded from the 1980s; however, since 2013, newsagents have clawed back toy sales and are now a sought-after channel among toy manufacturers.
Market forces are driving newsagents to pursue greater change and develop businesses that are more competitive and with a broader appeal to shoppers. While some suppliers continue to resist this, newsagents expect to finally unshackle their businesses from pre-deregulation anti-competitive practices.
Nowhere is the change confronted by newsagents more evident than in industry representation. In 2003, close to 3,000 newsagents were members of the national Australian Newsagents’ Federation industry association or one of its affiliated state associations. By 2014, that number was estimated to be under 2000, with newsagents relying less on national representation.
REFs: Australian Newsagents’ Federation, Newsagents Year Book (2014).
