The value of playing outside what has been traditional is vital for the health or the local newsagency, or any local retail business
A few months ago in one of my shops we introduced a new product category, something we had never stocked before, something appealing to a demographic we have not pursued with our buying or visual merchandising.
So In the first 16 days of this month we have just clocked over $1,000 in revenue for this new category. This is on the back of a $5,000 investment in inventory.
We are forecasting 12 month revenue at between $20,000 and $20,000 allowing for a seasonal bump, while maintaining that $5,000 inventory investment.
We had no idea if this would work for us. The $5,000 was a gamble we were prepared to take. We thought and hoped it would work, but there was nothing in the store we could point to that would suggest it would work. As I noted, it was new for us.
I’m grateful it is working, that the gamble paid off.
Now that we are around 10 weeks in, we are seeing new shoppers in to shop the category. We know from comments that this is happening because of word of mouth.
What makes the success more enjoyable for us is that we are using a location in the shop that was not performing before.
The whole experience is the reminder of the value for local retailers of:
- Experimenting beyond what is traditional for your business.
- Letting your customers tell you what they will buy.
- Capping your spend.
- Tracking the results.
- Relishing every new customer you attract to your shop.
- Not letting your shingle define you.
We’ve not changed anything in the 10 weeks other than top up stock. The plan always was to let it sit for 3+ months before change. With the results as they are, we think only minimal change within the category is necessary.
Anyone can do what we’ve done. And, it’s not about the products we specifically chose. That’s up to you. My core message with this post is to actually try something different and see what the results are for you. Good or bad, you will gain valuable insights.
Decades ago, back when we were agents others made strategic decisions for our businesses. Today, strategy is yours to determine, and one of the most important is to pursuit of new shoppers for they are the lifeblood of local indie retail.
Scottish newspaper publisher encourages readers to transition from print to digital – why it’s no surprise and of little concern
Scottish news publisher Highland News & Media is transitioning print newspapers to a digital only model and announced this late last year. Now that the company has started to publicly action its plan, by encouraging readers to switch from print, newsagents are reportedly unhappy, as Hold The Front Page reports.
The Federation of Independent Retailers has slammed the promotional campaign as “cynical, aggressive and a slap in the face for news retailers”.
Its head of news Brian Murphy said: “Our members in Scotland are shocked and appalled at the aggressive tactics that Highland News and Media is adopting in its bid to steal their loyal customers away from their weekly printed copy to its online version.
“The way the publisher is marketing the digital subscription packages for its papers shows the total disregard it has for retailers who sell its printed products. This is a slap in the face for newsagents.
“Furthermore, we have been given no prior warning about this. The first we knew about it was seeing the heavy – and aggressive – promotion inside the newspaper.”
While I feel for the impacted Scottish newsagents losing print newspaper revenue, it is no surprise the publisher is making this move. It has been on the cards for more than ten years. Indeed, back in 2009 when the Seattle Post-Intelligencer moved to a purely digital model it was considered a crack in the dam wall of print newspapers.
Smart newsagents have adjusted their business model to not rely on revenue or traffic from print newspapers and to cop on the chin the whack the pitches from publishers in their print products to encourage people to move online.
Publishing companies have one prime obligation and that is to their shareholders, just as us retailers have one prime obligation, to our selves as business owners. The issue, I think, is that our channel, certainly in Australia, was birthed as as agency model, one in which we served publisher masters for a modest clip of each transaction. For well over a hundred years, again certainly here in Australia, we were treated as what I’d call last stop agents, the end of the line, the least important.
We were paid poorly, less than award wages, our ability to monetise our position as agents was stifled, we had no control over revenue growth and had to absorb the cost of increased operating costs. And, as the transition to digital for news access began in earnest in the 1990s, many of us were captured in our agent world, because we only understood that world of service for a low percentage.
Too many newsagents kept looking at the ground, barely a step in front of them, ignoring the horizon over which many opportunities could be found.
Publishers have played a role in holding newsagents back, keeping them in. their lane of agency service, because it suited them to keep newsagents subservient as they, the publishers, figured out how to shift eyeballs to screens from paper. And, too often today, as we can see in several places, newsagents are kicked to the kerb once publishers action their plan to encourage and push those eyeballs to screens.
But, as I have said, it’s no surprise when a news publisher quits print for digital. They can only subsidise an out of date news distribution model for so long, and print, for sure, is any out of date model. Heck, it’s been out of date for more than ten years.
My advice to Scottish newsagents (not that they have asked for it or need it) who feel aggrieved by the moves under way by Highland News & Media, is to look at what your business could be without reliance on print newspapers. This means stepping outside the usual lane for a newsagency business. Look at categories beyond those usual for newsagency businesses and usual for convenience businesses. It’s not too late. But, it takes urgent action, investment and courage.
Before I wrap up I want to comment on this quote attributed to Brian Murphy from the Federation of Independent Retailers speaking about the more by Highland News & media:
“It is a proven fact that newspapers are a key footfall driver, and research shows that people buying a paper will often buy something else at the same time.”
I’d be interested to see the data supporting this as here in Australia it’s not the case, and has not been the case since the 1990s. I have looked at basket data from more more than 1,000 retail newsagencies over many years and since the 1990s, newspapers have held their position as inefficient in terms of basket depth, hovering at around 80% of newspaper purchases being for newspapers alone.
Newspaper publishers told us for decades that the commission (margin) is low because they deliver foot traffic. While they did that, those shoppers had a single destination product in mind and nothing could switch them from that mission.
The quote from Brian Murphy also indirectly pitches that traffic, footfall, is important. While it was back in the agency heydays up to the early 1990s, for those of us who transitioned to new product categories with substantially better margins, four and five times better, traffic was not as important. Selling something worth $300 and making 60% delivered margin dollars equivalent to 450 newspaper sales.
Are newsagents selling items worth $300 and making 60% GP? I know plenty who do, in city settings as well as in regional and and rural Australia. I also know plenty selling an item for user $10, but also with a 60% GP.
I guess the heart of this issue for local retail newsagents with what is happening re Highland News & Media is to configure your business so you are not reliant on any single supplier. It’s your business, rely on you, not them. Sometimes that can mean upsetting suppliers. So be it. If your decisions are right for you, that is what matters.
What you want, of course, is to be in control of the decisions about your business, because – suppliers will make decisions that are right for their business and that can be risky if the decisions are made by a supplier that is critical to your business success.
Look out over the horizon, leek for change opportunities and lean into them. You decide what your business, what it stands for. Don’t be constrained by history. Don’t be limited by your shingle.
If you think closing your newsagency or your retail shop for good is the only option …
I get it. Sometimes, the road ahead can have so many obstacles and the air is so heavy with fog that a pathway can be hard to find.
In the Aussie newsagency channel you can collect a ton of obstacles and feel surrounded by fog if you are drawn to the end is near talk and have your business rooted deep in the past for our channel.
If you feel like closing is your only option, I am writing this for you.
Stop. Collect data – your sales data, your financial situation information, local economic circumstances. Gather all the facts together, and go over them – not the emotion, the hearsay – stick to the evidence, the facts.
Usually, in the evidence, there is opportunity. The challenge is that often opportunities cannot be seen because of the noise of obstacles and fog. That’s why I say stop, get your evidence and sit with that.
My hope is that in your evidence there is sufficient opportunity to find a path forward for the business, and for you.
Turning a situation away from closing is my only option can only come about by one or a mix of:
- attracting new shoppers
- getting existing shoppers purchasing more
- making more from some of what you sell
- reducing costs
It’s pretty simple when you read the list. The hard part is the action, that’s where retailers can get stuck. I mean, attracting new shoppers is difficult, especially in small business where the levers we can pull are limited.
The best way to attract new shoppers in any local retail business is to introduce a completely new product category, to represent it well in-store and to pitch it appropriately on social media.
Your existing suppliers won’t have helpful advice in this area because they are your existing suppliers. You have to look outside your current pool of advice and influencers and look outside what people know your shop for. Choose a category that is fun, appealing and for sure traffic-generating. Ideally, it will be something not easily found locally, something that interests you. That last bit is important because one way to drive traffic for a new category is to be a bit of a local expert.
I get that it may be challenging to find the energy and money to make things work with a new category. If the survival of your business matters you’ll find a way.
The best way to get existing shoppers spending more is through a smart loyalty mechanic and having a shop people enjoy.
The best way to make more from what you sell is by charging more or buying better, or both. Don’t go crazy. A modest increase in GP% could work wonders.
Key to the success of any turnaround is starting on the road early, before fog and debris block the past. It’s important to all of us who own businesses to be looking well ahead, over the horizon, cultivating assets we can deploy when we think change may be needed.
Before I leave the topic I want to touch on reducing costs. That’s a common approach to saving a business. While it could help, rarely in my experience have I seen reducing costs alone be enough to save a business. Sure, it can be in the mix, but it alone is not enough. And the truth is that a well run business has trimmed costs already.
If you think closing your newsagency is the only option, reach out. There are plenty of us in the newsagency channel who will listen, and offer advice if you’d like it.
You are not alone.
Mark Fletcher
mark@towersystems.com.au mark@newsxpress.com.au
https://www.linkedin.com/in/mark-fletcher-tower/
The local Aussie newsagency is changing. It’s likely not the shop you remember.
I made this video Tuesday for one of my shops, to promote it on social media as well as YouTube. below I explain how I made the video and, more important, why I made the video.
I took the photos on my iPhone and used promo.com to assemble these, add text and lay music underneath. All up it took less than 10 minutes. I share these details to illustrate how easy it is for anyone to make a video like this.
Now, the why.
This video is important as it is us pitching a narrative for this shop. For decades, the narrative of the local Aussie newsagency has been controlled by others. Today, in 2023, the narrative about our shops is rooted in decades ago. It is out of date. It challenges our relevance. It does not help us.
I wanted to have a crack at recasting the narrative for this one shop in a suburban Westfield centre in the bayside area of Melbourne. While for sure I am biased, I think it’s a good video that does re-cast the narrative for this newsagency, while at the same time making a statement about the channel, calling for others to see us differently and not as others so wrongly and ignorantly pitch us.
I’d love to see more newsagents do this, make videos and other social media content that pitches our businesses with a fresh and relevant to 2023 narrative. Points about lottery jackpots and the major seasons are predictable, expected. The more we play outside of what is expected the better for us, the more we are likely to attract new shoppers to our businesses.
As I noted above, this video took less than 10 minutes all up. There are plenty of platforms you can use to make videos just like this one. While I pay a commercial licence for promo.com, there are others out there that are free.
As for the products I chose to highlight, plenty are made in Australia. In fact, half the air time of the video features Australian made, small business sourced, products.
I want to call out the final frame. This features a pair of colourful stud earrings on a card that says you inspire me. That is a very deliberate choice to pitch that message at the close of the video.
Hopefully all this background is helpful enough that other newsagents create content to recast the narrative of not only their newsagency businesses but the channel more broadly.
But back to the video. In 24 hours it passed 20,000 full views thanks to a nudge through the YouTube ad platform. That’s 20,000 people in the area of Melbourne I targeted who watched the video in maybe the first newsagency pitch they had seen in years.
I appreciate it’s not call to action advertising. It’s not intended to be. As I wrote above, this is about the narrative relating to the Aussie newsagency. We all need to invest in this. It’s far more important than think tank meetings and the like by people who do not have their own capital tied up in this channel.
UPDATE: 26/05 @ 3:11pm. I’m pleased this video has not been played 32,000 times.
UPDATE: 06/06/2023 @ 7:18am. This video has now been viewed more than 102,000 times.
Interesting history about UK newsagents, and comics
A short history of newsagents and how you bought your American comics from them. https://t.co/pubEBrroWA
— Glenn Miller (@FakeGlennMiller) May 23, 2023
What does your newsagency stand for? What’s unique about it?
In his 1960 book, Reality in Advertising, Rosser Reeves, a respected US advertising executive, introduced the world to the concept of the Unique Selling Proposition, USP for short.
Reeves defined USP in an advertising context:
- Each advertisement must make a proposition to the consumer: buy this product and you will get this benefit.
- The proposition must be one that the competition either cannot or does not
- The proposition must be so strong that it changes consumer behaviour.
In the 1960s and 1970s, the concept of a unique selling proposition evolved from being essential to advertising to being essential in business. Finding your business USP was considered mission critical to businesses, retailers especially. Businesses drifted however and forgot about the importance of a USP.
Today, it is common to see ads with we will not be beaten on price or if you find it cheaper elsewhere we will sell for 5% (or more) less. These pitches are from lazy marketers who think price is the most important USP and while it is a factor to some shoppers, value is often about much more than price.
Jack Trout told us a few years ago that USP was relevant today. In 2000, he said that a Unique Selling Proposition was mission critical in business in his aptly titled book Differentiate or Die: Survival in Our Era of Killer Competition.
Differentiate of Die. There is no doubt about the call to action in the title, no doubt about the consequences of inaction.
Yet many retailers, for the most part, have remained still in the face of an onslaught of competition. Some newsagents have remained still.
Retail is complex, challenging and changing rapidly today. The differences between competitors fewer. Retailers are surrounded by competition and it grows by the day. Yet many have remained still and done nothing.
Our channel continues to be confronted by the migration to digital, more local retail competitors and online shops selling what we sell. Those who have stood still feel the impact more than others.
Smart retailers are re-acquainting themselves with the writings of Reeves and Trout and leaning about the mission critical imperative of having a Unique Selling Proposition.
Differentiation could be service, products or location or a combination of these. Differentiation will most likely not be price as anyone can match this easily. Price is, after all, the last line of defense in any business battle. That said, there are some major price-focused success stories – WalMart for example. It is rare in an independent retail situation.
To develop your USP, engage with your employees and other stakeholders. or, do it yourself with your own deep dive into what you want your business to stand for. This is leadership. Take your time. Determine what you and your business stand for. Following open and honest discussion and debate, the USP around which everyone in the business can willingly congregate will emerge.
A good USP will not require an advertising campaign to communicate. It will become obvious through actions and decisions. By living the USP in every facet of the business you soon become seen as unique by shoppers and this can drive excellent word of mouth and success for the business.
While differentiation in retail is more important today than ever thanks to today’s economic conditions, the approach to the challenge is the same as in the 1960s.
If you are not sure where to start when considering your USP, look at your POS software and the data it curates about your business for in that data will be insights into your points of differences things you can cultivate to have a stronger USP.
Your POS software is a good place to start as your shoppers show you through their behaviour what they like and don’t like about your business.
No one can tell you what your USP should be. It has to come from you, from inside your business. It has to reflect what you believe, how you want your business to be seen and known.
Here are some things that are not a USP.
- Convenience is not a USP.
- Opening hours are not the USP they once were.
- Agency products like lotteries are not a USP.
- Magazine range could be a USP as many have moved on from deep range cover.
- Price is not a USP.
And while we are considering lists, here are some less than ideal things in business that could be a USP – note the strikethrough the S as they are not selling propositions but, rather, customer turnoffs that a retail business could become known for (in a bad way):
- Poor customer service.
- High prices.
- An EFTPOS surcharge.
- Poor range.
- Bad opening hours.
- Poor counter processes.
Here’s another list of some easy USPs:
- Local community connection.
- Community group support.
- Product range.
- Product knowledge.
- Fun in-store.
- Quality products.
- Value.
- Appreciation of shoppers (loyalty).
It can be tough coming up with something genuinely unique. But, once you have it, it can be worth the work.
Take your time. Do it yourself. Be the leader your business will love.
The Pharmacy Guild protests too much about prescription changes
It was galling to watch the president of the Pharmacy Guild weep and moan on TV last week about the planned changes to more efficient prescription access to 300 drugs on the Pharmaceutical Benefits Scheme.
The planned changes mean people accessing these medications will be able to get 60 days worth of their medicine instead of the current 30 days worth, meaning one dispensing visit for 60 days instead of two.
I get that pharmacists will lose some revenue. Those needing the medication will save time and costs involved in getting out to collect them. The government will save costs.
I think the gains for consumers and government (taxpayers) outweigh the modest cost to pharmacies.
If you believe the weepy president of the Pharmacy Guild, this move will end some local pharmacies. If that the case, the businesses must not have been strong enough to start, they must have been relying on their government protected monopoly.
In my opinion, pharmacists have been protected for too long, and at too much of a cost to Australians.
24 years ago Aussie newsagents were stripped of the monopoly they had over local newspaper and magazine distribution. This was taken from us under the guidance of the Howard Coalition (Liberal / national) Government. It was taken from us without any compensation. The cost to the value of local newsagency businesses was tens of millions of dollars in business valuation and tens of missions of dollars of revenue.
Good retailers in the newsagency channel thrived. The deregulation made them evolve from agents into retailers.
While kicking the protection crutch of protection hurt and demonstrated a lack of care for local small business retail by the Howard government plenty of us got through it. For sure, compensation would have been good. But, maybe those leading the channel at that time did not have the skillset to achieve anything for newsagents. We’ll never know. It’s 24 years in the past now.
So, back to the pharmacists, while they can moan and complain, and cry, the reality is that the current approach to dispensing prescriptions is inefficient and expensive, to the benefit off protected pharmacists. Making them more efficient and saving money have to be a benefit to the health system and to Australians more broadly.
Local retailers I have spoken with since the tears were shed on TV a few days ago offered no support for pharmacists. It seems to me like they over-egged their response to what feels like a reasonable move.
In the 23 years since deregulation, as I have often covered here, newsagents have benefited from relying less on protection and more on being entrepreneurial. Most in our channel today have stable businesses, plenty are growing, with the growth com ing from decisions we make, rather than some legacy suppliers.
Footnote: I do understand that in some settings, particularly in regional and rural Australia, and in genuine community pharmacies, the move may present some challenges. I suspect that if you look at actual financial details in those businesses you will see the impact will not match the emotional outpouring of some in the last week.
Cards in the front window of the newsagency attract shoppers
This full face display of Mother’s Day cards in the front window is attracting passers-by into the newsagency on the busy Glenferrie Road in Malvern. That was the plan, our hope. It looks like paying off.
In December 2021, this space was taken by a drinks fridge, and ice-cream fridge and a stand of AWW cookbooks. Slowly we have change what’s here, culminating in the installation of this card wall a few weeks prior to Easter.
I think there is nothing better than awesome good margin products attracting shopper traffic from off the street. It’s a bonus if they are habit related products, products from a category for shoppers could return to you.
.
This shop is in a highly competitive location for cards with two newsagencies nearby, several supermarkets, more than 15 card and gift shops and an Australia Post outlet also with a good range of cards. We have the biggest range in the area, but it’s located in the card department inside the shop. I knew we had to bring a card pitch to the footpath.
While our card suppliers have been supportive, we funded this new fixtures ourselves, so that we control the use of the space. This will be especially critical with how we use the space outside of seasons, especially in the retail valley between Mother’s Day and Father’s Day.
On the space itself, we have the capacity to extend it to the left, to almost double the space. This will be needed for Christmas.
A bonus of this new card wall is that we no longer need seasonal card floor units. This frees up floorspace and assists traffic flow. Also, on the new wall, cards are better presented and more easily shopped than in a floor display unit.
While the pitch in the front window of the newsagency right now is Mother’s Day cards, it will change from may 15 to a different card offer.
We used a handyman to install the slat wall, this was a fraction of the cost of a shoplifter. We are frugal in managing our capital investment in this business, and in each of our shops. Our approach tends to be: make a change, measure the result, if good – move forward, if bad – re-group.
Too often over the years I have seen retailers access funding for a new or partial fit out and too much of that money be spent on changes that will not pay for themselves in 3 years. Funding it out of your own pocket makes you more cautious about the spend.
Be frugal. Follow your data. Take small steps. Back yourself over tradition.
Yes, a shoplifter may have created for us something more grand. I doubt it would have delivered a better financial return though.
While our shops are a reflection of us, they should not be a shrine or a showpiece, unless that makes money, turns a profit in the investment, in 3 years or less.
Footnote: some suppliers will be keen to engage with you on changes in your business. For sure, listen to them, but, it’s your business, not theirs.
Newsagency of the Future – a free online workshop about retail newsagency businesses
Join me via Zoom Tuesday May 16 @ 11am Melbourne time for a Newsagency of the Future workshop.
I will share up to date retail newsagency performance data, sales data from outside our channel for categories allied to what we do, thoughts on the rest of 2023 and into 2024. I will also cover some trends into the future that present opportunities.
There will be an open Q&A.
While Covid continues to circulate, it is over from a disruptive perspective. I think there are things we can leverage from the pandemic experience. I also think there are category opportunities for growing business GP% and attracting new shoppers.
I am not running the session to sell you anything, or to get you to sign ups to anything. My sole motivation is for the retail newsagency channel to be strong, vibrant.
It is a competitive world out there and I think all of us in retail newsagency businesses can do better.
Here is the link:
https://us06web.zoom.us/j/84982771189?pwd=RWdRM0s3bENpZ2F5UGxNblkzKzN3QT09
Meeting ID: 849 8277 1189 Passcode: 103292
I’ll record the session.
Anyone is welcome.
We play a role in the newsagency channel narrative
Every time we talk to someone, anyone, about our business, retail, local small business retail, anyone, we add to the narrative about our channel, local retail, small business retail – in addition to the narrative about our business.
When speaking to the media, journalists in my experience come to us with a bias about our channel and about local small business retail, unfortunately.
“Business owners, nowdays after COVID-19, we are not making any money. Please don’t do this,” Singh said.
This is a quote from a newsagency owner, from a story by 9 News in Melbourne about a newsagency that was robbed.
I get the emotional feelings following the break in would underpin anything said. The journalists would know this. I also get there is no point saying we are doing fine when being interviewed about a robbery.
The quote does nothing for the narrative of newsagency retail or local small business retail in general.
Our choice.
All of us who own newsagencies have chosen to do so. We have made that decision. Just like we decide who works for us, what we stock, how we display it and how we promote our businesses.
These are all our choices.
The performance of our business is a consequence of our choices.
If business is tough we need to respond. If what we respond with does not work, we need to change our response. We need to keep changing until we can change no more because of time, resources or will.
The thing is, our business reflects us. We choose how we present ourselves, and that can impact others that trade in similarly named businesses, no matter how different our businesses are.
I know of many newsagents doing well. Most newsagents I speak with had a good Covid. Plenty of newsagents are making good money.
I get that there can be local circumstances that beat against the pursuit of success. Online can help play outside that, and online has been an active option in our channel for more than ten years.
I also get that personal financial circumstances can dictate what we are able to do. However, we chose to be in business.
Here are some truths about newsagency retail in Australia today. While I accept people may disagree, on these points I have seen enough data to know they are true:
- You determine who notices your business based on the products you carry, where and how you display them and how you promote them outside the business.
- Convenience retail is not successful for independent newsagents.
- Value retail, like what you see in a discount variety store, is not successful for independent newsagents.
- Tobacco has no upside, no benefit for retail newsagents.
- Vape products have no upside and will limit your shopper reach.
- Everyday confectionery at the counter is far less successful than more unique and higher margin items.
- Newspapers work just as well in a less expensive location than the high-traffic front of the shop publishers want.
- Greeting cards is the best margin category in your business and it is the one that responds best and fastest to your attention.
- $1 and $2 cards deliver little, or, usually, no financial value to the business.
- While agency business brings people in, in too many situations that foot traffic is not adequately leveraged to valuable retail sales.
- Newsagents can sell gifts at $200, $300 and more apiece.
- You are not your customer.
I could go on.
In truth: if we are finding business is tough, if we are not making any money, doing the same thing over and over will keep us in that rut.
Free online workshop: Websites for newsagents
Join me for a free workshop Wednesday March 22 @ 2pm Melbourne time:
Websites for newsagents.
March 22 @ 2pm.
Let’s look at:
- What’s working.
- What people are looking for.
- Where to start.
- Why it does not need to reflect your newsagency.
- How to do it for the lowest cost possible.
- Risks and how to avoid them.
Anyone is welcome to attend. While my POS software company develops websites for retailers, including newsagents, this is not a sales pitch. The advice shared will be useful to anyone, regardless of supplier.
You don’t need to book. Just turn up. 2pm Melbourne time March 22.
https://us06web.zoom.us/j/88276032133?pwd=cWgzYjFQaVRPM3diVUNnWjd6L1pqZz09 Meeting ID: 882 7603 2133 Passcode: 207681
I will record the session and decide later if I make the recording available.
You can access this Zoom from any device, anywhere. Having a camera is ideal for participation.
It is common for people joining a session like this to be a voyeur, to watch, and not actively participate. The best value is achieved through participation. No question is wrong, or ignorant. Ask away. It’s likely that what you ask others want asked as well.
Why newsagents need to have an online strategy.
The history of our Aussie newsagency channel is rooted in serving locals, in the local community, through newspaper and magazine delivery.
For too long, we have played purely local and while that may feel nice, it does not maximise the return we can achieve.
Every dollar you make from someone who lives hours or days away from your shop is icing on the cake, bonus revenue. And, because of data collected from online sales, it is easy to win more sales from online shoppers.
A smart online business leverages at the very your existing labour and space investment. This improves business efficiency. I have not listed inventory investment here because some of the best online businesses I have seen started by local retailers, including newsagents, are for new product categories that are not reflected in the shop.
A focussed modest online shop offers you a place to reach more customers, sell when you are closed, make better use of existing resources and make your business worth more every day.
An online shop in your newsagency is smart business.
Too many newsagents overthink this. They spend too long and too much money planning and designing.
A common mistake is that they think they need to put what they sell in the shop online. While in some circumstances this makes sense. Most often it does not make sense.
The carpentry adage of measure twice cut once does not fit website plans and development. When it comes to websites, my advice is launch early and launch often. Failing is good if you learn, recalibrate and launch again.
I have had websites connected to my retail newsagency businesses for many years. Most are successful. This is thanks to the failures.
Join me for this free workshop if you don’t have a website today.
Let’s not get sucked in by downcast sales forecasts from big retailers
Some big retailers are predicting flat or declining sales through 2023 and into 2024. There are forecast reports of comp (comparable) store sales, we tend to call these same store sales, of 3% to 5%.
The challenge is that journalists and news editors hear this and attach the downward forecast to all retailers.
I know plenty of independent retailers, including independent newsagents, who are forecasting growth over the same period. Know, not massive growth, but growth nevertheless.
In my own stores, I am planning for 5% growth and hoping for closer to 10%. But more important than the sales revenue growth number is growth in business GP percentage achieved. Growing that several points is more important than revenue growth.
If you grew business GP% by, say, 3% and overall revenue by 1% the bottom line benefit to the business would be considerably magnified compared to no change in GP% and 1% revenue growth.
There are many growth opportunities in our channel, many opportunities for retail newsagents to achieve good growth in revenue and in gross profit percentage performance.
How do we achieve that?
Look at your current sales data, look for green shoots, indicators of opportunity for you. In a retail newsagency these are typically in cards, magazines and stationery. Sales in these departments can indicate opportunities outside of them, maybe in new areas for the business, better margin areas for the business.
I know of many retail newsagents where this approach of data lead range review and gross profile percentage growth is successful.
Covid.
One of the consequences of Covid was that many shoppers tried local retail for the first time in years. We showed that we offered diversity in products and personal service. We can continue to leverage these differences. But we have to show rather than tell.
Big retail looks like big retail. Their displays tend to be blah and their differentiator tends to be price.
In local retail, displays that are more fun, appealing and enticing can work well. back this with shop floor knowledge and genuine personal service and price is a secondary factor. people want to enjoy shopping. They want to walk out of the shop feeling good. That feeling is currency, it pushes pure price to a secondary consideration as value is felt in other ways.
The economy.
Yes, there is pressure in the economy because of rising interest rates. There is still plenty of money around for what people want. Want is a big driver for spending. It’s the emotional purchase where you have good opportunity. Especially as a skilled local retailer who is able to feed into the want.
You.
The reality is that there will be more tough economic news and negative reports about retail. You can choose to watch that and worry, or you can create the retail experience that is an oasis of happiness, a place locals enjoy and are happy to spend. Every day, choices you make in your business determine this.
If you do what you’ve done every day for years, your results will be what you are used to. I think the Aussie newsagency channel can do much better than that.
I wish journalists and editors would do better in reporting on retail newsagencies in Australia
Merewether Newsagency in Newcastle closed a few days ago. The ABC had a terrific radio report about the closure, the history of the shop and characters worked in the shop.
The interview with the current owner focussed on the reasons for closure. Unfortunately, the decline and ultimate closure was tied to newspaper sales.
Smart newsagents stopped relying on newspaper sales ten years ago. Sure, we sell them. Sales are declining. Real margin is lower now than years ago.
Many decisions by newspaper publishers have told newsagents to not rely on newspapers.
I know of newsagents in small towns of 2,000 and even less people who are running successfully evolved businesses.
While the closure of any newsagency is sad for those involved and the community, there are many good stories out there about newsagencies that are thriving, and that’s a story that journalists and news editors appear disinterested in.
Big retailers are expanding beyond their lanes, are you?
Two stories over recent days reinforce the extent of change in retail and remind all of us in local indie retail to consider change as well.
As I have written here previously, trading outside what has been traditional for your retail business is key to attracting new shoppers, to opening the appeal of your business beyond what has been usual for you.
Yesterday, Bunnings announced the addition of 1,000 pet related lines.
Bunnings gears up to be dog’s best friend with expanded pet range
Emma KoehnHardware giant Bunnings is hoping shoppers will add dog food and toys to their shopping lists when heading in store as the retailer launches a significant expansion of its pet merchandise business.
Bunnings will throw down a competitive challenge to specialty pet retailers, which have boomed since the COVID era, when it expands its range from a couple of hundred items to close to 1000 products from late March.
This is a smart move because the majority of pet related purchases are habit based and habit based shoppers are tremendously valuable. Their regular shop is valuable in the context of what else a business operates.
It’s kind of I told you so but around 5 or 6 years ago I suggested the pet category to newsagents.
The other move in by Chemist Warehouse, into optical.
Chemist Warehouse and Peter Larsen join forces to ‘disrupt’ optometry industry
MYLES HUME
February 15, 2023, 3:18 pm 847The first store in Melbourne is the start of a mass rollout to take place in the coming years.
Australian pharmacy retailer Chemist Warehouse has entered the optometry market, opening its first store in the Melbourne suburb of Malvern and appointing prominent industry figure Mr Peter Larsen as its managing director.On 15 February, Optometrist Warehouse announced it had opened its first location at 120 Glenferrie Road, with plans to “disrupt the industry” in the coming years.
“Initial expansion plans include the opening of a handful of stores in 2023, followed by a mass network rollout which will see Optometrist Warehouse become a household name and the go-to optometry service provider within the Australian market,” a press release stated.
I noticed the Chemist Warehouse move as one of their first locations is two doors from one of my shops.
These are thought out moves, designed to reach new shoppers, to strengthen existing, well-established, businesses. In each case they target product / service categories served by vertical businesses, specialty businesses focussed only on these niches. It’s those narrow-focussed businesses that are at risk.
This is why I think it is vital that any local indie retail business draws shoppers for many different reasons, and not just the usual 3 or for product or service categories that we see are typical in a newsagency business.
So, my question today is what moves are you making to attract new shoppers? You have to have made or be making moves because you need new shoppers, especially new shoppers who would not usually shop your shop.
Across at my newsXpress business we have been focussed on this for years – the need to attract new shoppers, especially the need to attract and serve habit based shoppers.
It’s not too late. There are plenty of opportunities. The moves by Bunnings and Chemist Warehouse should wake some local retailers up, and help them see the opportunities out there.
Retail is changing in 2023 at a faster pace than in recent years. We need to change.
Newsagency sales benchmark study results: 2022 vs. 2019
Thank you to the 119 newsagents trading under a variety of shingles and in a variety of settings (rural, regional and suburban high street) who provided sales data for this benchmark study. The only connection is that they use newsagency software from my POS software company. Their transparency will help many in our channel.
Plenty of good news in retail newsagency benchmark study comparing 2022 to 2019.
Many newsagents had an excellent 2022 compared to 2019, the majority who participated in this benchmark study in fact.
Common among those who did well is active engagement in non newsagency traditional product lines, active promotion of the business outside the business, and focussing on three key metrics: basket value, margin and the cost base of the business.
Common among the businesses that did not report as good results is their focus on traditional newsagency operation: lotteries, papers and magazines more so than other product categories.
What is particularly interesting is the results for businesses that transitioned from traditional in 2019 to innovate in 2022. In those cases, the results are extraordinary. In one million dollar business the revenue was almost the same but business GP% moves from 29% to 34%, which is an extra $50,000 in gross profit. In another business they added $120,000 to their $590,000 revenue with the added revenue for items achieving more than 50% GP.
This is the story that stands out when comparing 2022 to 2019, transition. Transition from relying on agency revenue, from relying on commission, to relying of good margin from sought-after products through which the business can attract new shoppers, non newsagency traditional shoppers. A highlight of the transition as evidenced in the dataset is that size and location do not matter. Okay, location in terms of shopping centre matters as it’s not proving to be a winner for our channel, but outside of shopping centres – city or country, large or small – success is equally attainable.
After comparing data from the businesses in the benchmark dataset here are the averages for business performance measurement points and categories, comparing 2022 with 2019:
- Revenue: Up 9.5%.
- Sales transaction count: Down 1%.
- Basket value: Up 9%.
- Items per basket: Up 7%.
- Average item value: Up 7%.
- Greeting card revenue: Up 7%.
- Magazines unit sales: Down 1%. This is an unfair measure because of the big difference between businesses, bigger than for any other category.
- Toy (incl. plush) revenue: Up 22%. 25% of those in the study have this category
- Gift revenue: Up 35%.
- Book revenue: Up 15%. 12% of those in the study have this category.
- Fashion: 70%. 20% of those in the study have this category.
- Stationery revenue: Up 3%.
Since the above results are averages, there are some considerably below and some considerably above.
There is also interesting data within departments, like stationery and magazines:
- In magazines, weeklies experienced the biggest decline again. Special interest titles are the winners, often delivering double-digit growth.
- In stationery, everyday is patchy but special interest, fringe, stationery is doing very well.
- Newsagents with a unique add-on category, such as firearms, music or pet food, tend to see these doing well.
I have a note about traditional categories: lotteries, papers and magazines. They are important, but they should no longer define your business. Make what you can from them, support them well, but do 9other things to attract new shoppers who will purchase better margin products from you. And on magazines, if you focus on special interest titles and promote them outside your shop, you could do very well.
Evidence.
Common feedback I get from these benchmark studies is can I see the report for the best shop so I can learn. I can’t do that. But I can share snippets. Here are some category specific snippets from different businesses. The results speak for themselves.
Cards.
Gifts.
Toys.
Clothing.
Magazines.
I am concerned about my numbers, what can I do?
If you want better results it is up to you to act.
There is no one size fits all solution, anyone who says there is is wrong.
The first step is to understand where you are at, from the data evidence in your business. next, you need a plan. Then, you execute with clarity and commitment, and draw on the support of others who have done this.
I own newsXpress, a marketing group supporting newsagents. newsXpress helps with this. If it interests you, please email help@newsxpress.com.au or call Michael Elvey on 0400 331 055 – he’s not a sales person, he’s part of the team encouraging success.
Mark Fletcher
M | 0418 321 338
https://www.linkedin.com/in/mark-fletcher-tower/
Smart buying: Having products that sell for more than one reason, to more than one type of shopper
The more we stock our shops that appeal to multiple buying situations the better for our retail businesses, the more efficient our inventory investment, the more opportunities for out of store promotions.
This candle is a good example of what I am talking about.
Candles are candles, right?! They are everywhere. Many different types of shops have them. The marketplace is covered well for people shopping by scent and different types of ingredients. And, new local makers are popping up almost daily.
This candle, by virtue of the fun text on the label, offers a different reason for purchase. It’s fun, self-deprecating, a good conversation opportunity when given.
Having items that could be purchased for more than on reason helps improve inventory efficiency in the business. In local small business retail this is especially important. If an additional reason is humorous related, it’s a bonus.
A candle like this in a town with plenty of candy outlets gives you differentiation.
This candle is an example. There are plenty of products you can buy to serve this purpose. My suggestion is to look for multiple purchase opportunity products, to expand the appeal of what you sell, and to provide you with opportunities to reach more possible shoppers through out of store marketing.
HEY AUSSIES, THE LOCAL NEWSAGENCY MAY NOT BE WHAT YOU THINK IT IS (PART 7)
Randalls newsagency in Bourke New South Wales is a perfect example of innovative retail in our channel, offering products outside what has been traditional for the local newsagency business, and taking that diversity online to reach shoppers far away from Bourke. In a town of less than 2,000 that is 800km from Sydney, here you have inspiring retail.
Nancy and the team at Randalls newsagency and their website, Back O Bourke Collective run an awesome business, a business that challenges what we think of as a newsagency.
This series is about showing journalists and others that the local Aussie newsagency has changed and while, for sure, there are some running old-school newsagencies rooted in the 60s and 70s, many have transformed their newsagency businesses to be fresh, inviting and vibrant. many are running local newsagency businesses that are changing, evolving, meeting new opportunities.
This is retail in 2022 and beyond, especially local retail, and even more especially local newsagency retail.
The Aussie newsagency channel was created in the 1880s to deliver news publications to the goldfields of Victoria. For decades ours were agency businesses, doing the bidding of the companies for which we were agents. It is only in the last 20 years that some in our channel decided to be retailers rather than agents.
Today, the newsagents who are growing their businesses are retailers first with either no agency business or modest agency business that does not dominate what they do in their businesses.
The local Aussie newsagency has come a long way from what Aussie journalists and others think of us as. The more show how far we have come, the better. This series is about shining a light on some good examples of this, some good examples of retail newsagency businesses that are quite different to what people expect when they think of the classic Aussie newsagency.
Shops like Randalls newsagency in Bourke NSW are a beacon not only for retail newsagents but for local retail more broadly. They are showing that location and size do not matter. They are showing that you can grow by thinking outside of the physical boundaries of your local town.
Whether it is in-store online, there are no borders to what a local newsagency can be, and this is exciting.
What is the future of the local Aussie newsagency? Well, that is up to each newsagent, each retailer in the channel. There is no channel-wide problem. rather, there are thousands of local retailers making decisions every day that will determine the future, and from where I sit, with what I get to see from many colleagues, the future is bright.
Deeper sales basket online
Comparing like for like category online sales to in-store for a couple of online businesses I have that are in the same space as retail shops I own, the average online basket depth is deeper than in-store.
While both in-store and online have seen basket value increase, online is still 40% and more up on in-store. This could be because an online shopper is chasing a free shipping trigger, or because they want everything to come at once whereas a local in-store shopper knows they can return.
We have certainly been thoughtful in our online store settings and our licence product ranging with an eye to achieving a deeper basket.
If have spoken with retailers from several other retail channels and they experience the same – a deeper basket for online sales than in-store.
I mention it today to reflect on another difference online versus in-store – the deeper basket.
A deeper basket is a more efficient sale. Add this to the icing on the cake value of online and you see terrific value for the business from online.
This basket information, coupled with other analytics such as shopper source, returning shopper value, conversion rate and more and you have a dataset that is tremendously useful in considering business development.
At the time of writing, online sales are at 2,642 transactions, which I am very happy about.
Terrific online sales for newsagents
Plenty of newsagents with their own website are enjoying terrific online sales, and by terrific I mean good enough to add real value to the bottom line of the business.
In my own 4 shops we run for store specific Shopify websites, and they are doing well … but more on the results of those another time.
For many years, newsXpress has offered free access to members to sell on network connected Magento based tech websites for Jigsaws, Pop! Vinyls and Beanie Boos. These websites generate online sales for businesses without the need for a local store website.
What’s unique about the websites is that they offer shoppers a single warehouse view for items located across the fleet of connected newsXpress businesses. This tech was built before Magento offered it. It was ground-breaking on so many levels.
People shopping on the site can also see exact current stock on hand data at the store level. We do this to drive in-store traffic. We know from Telstra data that more than half of the time people use a website is to see what stock is available in a shop they are considering visiting.
By offering shoppers access to inventory across a fleet of stores drives a deeper basket. The tech of the website preferences stores closest to the delivery destination, fanning out based on availability.
It is common to see big sales, like this one from yesterday morning going to Moreton Bay in Queensland:
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For orders over $100.00 shipping is free. It is subsidised by newsXpress to help member businesses maintain good margin. They purchase the Boos for a lower price than any other retailer, which also helps.
I share this here today for a few reasons:
- There are some in our channel who talk down online, saying it is not big in newsagency businesses. I know of plenty of newsagency businesses where online is more than 25% of revenue. I suspect they talk it down as that narrative suits their commercial interests.
- There are some newsagents who don’t think they can do online. Some of the businesses listed above thought that too. All they had to do is to flick a switch to get sales.
- Online revenue is usually to people you will never see in your shop. It’s icing on the cake revenue that leverages existing inventory, labour and space.
- Collaboration magnifies the value opportunity for newsagents. Our channel started as a collective of small businesses working together. Over the years, the collective faded away. Small businesses collaborating to support a single website help those businesses win sales they would otherwise not win. This sale, a not uncommon sale, is an example of the value of collaboration.
- Actions speak louder than words. In our marketing, newsXpress says it offers these types of group member websites. This post backs that up with evidence. This Boo website has been live for many years. It has generated millions of dollars in revenue.
- Some in our channel say Beanie Boo sales are dead. I say there is no evidence is sales revenue that is the case.
- Some say it costs too much in stock. I know of newsXpress businesses winning good Boo sales from $1,000 in stock.
- Some say online is too hard. It’s not when you have good head office support and good tech for capturing and managing sales.
- Small businesses can compete with big businesses. This sale represents and the Boo website offers proof that small business retailers can compete with big businesses. Big W, target and K-Mart can’t and don’t match what this time offers, and shoppers understand that.
The big thing about online and those who talk it down or question results, you don’t know what you don’t know. By this I mean, unless you are active in the online space, and I mean deeply active here running 1, 2, 3 or more consumer-facing websites of your own and have done so for several years, you really don’t know what you don’t know.
I have discovered that for myself.
We launched a new consumer-facing website a few months ago. It did okay, but was soft. We looked at how people engaged, where they spent time, what they picked up but did not purchase, and more. We modified the website and it was like turning on a tap. $15,000 in sales in 4 weeks. $15,000 additional revenue for the newsagency business. 50% margin business. Business leveraging existing stock, labour and space. And, this website is a baby, it’s not even walking yet.
I have to say, though, that what I have not yet covered here is the website failures, and there are some glorious failures that have been wonderful learning experience. the successes today stand on the broken bones of those files websites. It’s what happens in business: try something and if it fails it becomes a success by teaching you things.
Online is not going away. I think it is essential for every retail business to have an online opportunity in their business. The best opportunities will come from those connected to, those who understand your business those who want to help you bring it to life for you, and not your local web developer or accountant.
Is this a newsXpress pitch? Kind of. But it is more a pitch about the importance and value of being online, being found by people who do not walk past your front door … because it is those people who offer you the icing on the cake opportunity, the bottom line net profit hit we all love to see.
Unfortunate coverage by the ABC of the Nine Media decision on newspapers in Tasmania
The ABC yesterday reported that Nine Media will review the decision to stop same day access to print editions of The Australian Financial Review and The Age in Tasmania.
However later on Wednesday, Australian Lottery and Newsagent Association (ALNA) chief executive Ben Kearney said he had been contacted by Nine and told the decision was under review.
He said no timeline was given, and the original intention may still stand.
“They’re going to look at that decision and consider some of the other options that might be available, so certainly from our point of view that’s really good news, that’s what we’ve asked for,” he said.
A couple of points in the ABC article have me scratching my head.
Newsagency co-owner Teresa Sturzaker said her Hobart business would take a financial hit if the original decision went ahead.
“The direct hit is a $25,000 profit per annum, so it’s about $2,000 a month that we’ll lose straight off the top starting,” she told ABC Radio Hobart.
The $2,000 a month figure from The Age and the AFR seems high. It equals $8,000 a month in sales of these 2 titles in one business. If that’s what they do, it’s awesome. But if that’s what they do I’d have thought Nine Media would have a plan B for them. If it’s a distribution business, based on what Nine and News have been doing around Australia it is only a matter of time before it is taken from the newsagent and managed through one of the new publisher distribution partners.
Launceston newsagent Garry Matthews said he would lose a lot more than just newspaper sales.
“Probably across the board, you’re not going to attract your general walk-ins anymore,” he said.
“If they no longer can come in and buy a paper and a cordial … it just means there’s one good reason why they don’t come.”
“It’s pretty sad that a big company like Nine should really care very little about Tasmania.”
Any newsagent running a retail business built and relying on shoppers coming in to buy a paper and a cordial is doomed. Supermarkets and convenience stores own that business. Over the counter purchase of newspapers has been in steady and predictable decline for 15 years. While there is an occasional bump because of a news story, the downward trajectory is set.
Smart newsagents years ago started attracting shoppers for other reasons. In know newsagents in rural and regional Australia, in small towns, that are thriving because they made this shift. Sure, they still sell papers, but they do not rely on them.
The report by the ABC yesterday plays in to an old and out of date narrative that does not serve the newsagency channel well. It makes our businesses look out of date. It does not reflect accurate reporting. The ABC should do better on this.
What people read in The Age and AFR is old news. The opinions that pack their pages are old, too. How people access this has fundamentally changed forever. There is no going back.
What News Corp. and Nine Media are focussed on right now is to achieve the best landing for their businesses, for their shareholders, and that does not include sustaining print forever. If you are a shareholder in either or both you’d want them to maximise profit as that sets your return. If print editions in Tasmania are loss making, you’d want them cut regardless of an emotive story from newsagents.
I get that it will be unpopular to call out the quotes from newsagents as I have done. We owe each other the truth. The truth is, print newspapers are in decline. The publishers have demonstrated this to us through their decisions over the years.
More fool any newsagent who expects the publishers to put newsagent needs ahead of the needs of their shareholders. Publishers have only one legal obligation, and that is to their shareholders. Any emotive argument to the contrary will fail.
My advice to newsagents for years has been and is today:
- Choose to be a retailer, not an agent. the two are quite different. One makes you the driver of your success while the other tethers you to the success of others.
- Chase new traffic every day. The more reasons for which you attract shoppers, the more sustainable your business.
- Convenience is not a future for indie retailers like newsagents. Convenience retail in Australia is owned by big businesses with deep pockets, which which you cannot compete.
- Don’t be your barrier to success. Too often I see local small business retailers decide against something for their business that will work.
- Size doesn’t matter. Some of the most successful newsagency businesses in Australia today are small. Size is irrelevant.
- Location dosen’t matter. Some of the most successful newsagencies in Australia are regional and rural.
- The shingle doesn’t matter. The newsagency shingle is irrelevant to what you can achieve.
- Only you can save you. No supplier, no association can save your business, only you can.
- Make every day your pay day. The value of your business today is what you make today, not what you dream of selling it for in the future. Make every decision on that basis.
There is upside for our channel, plenty of good news. I talked about this recently when sharing the results of a traditional newsagency that I am fortunate to be helping to evolve: https://vimeo.com/756607390 I know of many success stories of growth and profit in our channel, in businesses that sell newspapers, but which to not rely on newspapers.
Selling outside your newsagency – a free workshop for newsagents about online, how to, where to and when to
Join me online for a free workshop this Monday, October 17, at 10:30am Melbourne time in which I will explore with you how, when and where to sell to people who will never shop in your shop.
I will share experiences:
- Selling interstate.
- Selling overseas.
- Dealing with fraud.
- Packing and shipping.
- How to sell what you don’t have in your shop.
- Pre-selling.
- Payment methods.
- Marketing, including Google image advertising.
I will also cover factors that may mean online is not for you.
In addition to the group websites my business has created for retailers in the newsXpress marketing group, I have single-store online shops connected to three of my retail businesses, each in a specialty niche, each attracting good business. I’ll take you under the hood to see what that looks like and explain how any retailer can do this.
This is not a sales or marketing event. It is pure business advice you can go use any time that suits.
https://us06web.zoom.us/j/86896859959?pwd=aFdTdGNuSXZvOUxuL1pFUWpya0FzQT09
Meeting ID: 868 9685 9959 Passcode: 877510
Online is here to stay, and sales from online are growing. My goal with this session is to provide information so you can make informed decisions about online.
While the session will be recorded, I will decide after the event whether I release it.