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What does the future look like for Australian newsagency businesses?

I did an interview a few days ago and this was the opening question.

What does the future look like for Australian newsagency businesses?

While we won’t know the answer for years, what we know today is what we offer the local communities in which each of us serve.

The question from the journalist was rooted in a belief that our future relied on the sales of lottery products, newspapers and magazines.

Thankfully, for many in our channel that is not the case. Many of us have followed paths on which we do not rely on these legacy products while, at the same time, continuing to offer these products.

More of us in our channel to do more to spread the word that the local Aussie newsagency is evolving, and that the future looks bright because of this.

My newsagency software company serves more than 1,700 newsagents. That’s why we created this video and other collateral supporting the Aussie newsagency channel. I grateful to newsagents for their support.

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newsagency of the future

The retail job shortage has retailers changing-up their approach to recruiting

The challenge of hiring and retailing retail workers is worldwide. It is causing retailers to go to extraordinary lengths.

In a small US town I was in a few days ago, of the 25 shops on the Main Street, 21 were advertising vacancies in their front window.

In a Taco Bell that I visited (don’t judge me) 3 days ago, every place where this chain restaurant location would usually promote meal options and deals, they were advertising for people.

The moment you step into Taco Bell, you see this table.

Four of the windows had these signs facing inside and out.

The front window had sign writing, too:

Above the registers and at the self-service tech screens they had signs too.

But back to the table inside the front door. They had collateral pitching employee benefits:

On top of all this visual noise is the pitch at the counter. Yes, they were asking some (but not all) customers if they knew of anyone looking for a job.

In this Taco Bell outlet, looking for new staff was more important than promoting what they sell.

Apple responded to their staffing challenges with an announcement a couple of days ago. Apple is increasing the pay of retail employees by 10%.

Apple Inc. is raising salaries for retail workers in the US by 10% or more and upping its global companywide compensation budget as it faces a tight labor market and unionization efforts.

The company is hiking hourly pay for retail staff to at least $22 per hour, up from a previous $20 minimum, the company told employees on Wednesday. The move follows a pay bump in February after inflation grew more severe and some staffers complained about working conditions during the Covid-19 pandemic.

Apple and Taco Bell are not alone.

During the trip to the US I got to speak with a broad range of business owners and managers. Staffing is their top of mind challenge. Some are taking the Apple approach and increasing pay rates. Others are offering signing bonuses and new employee referral bonuses. Others are ensuring they run companies people enjoy working for.

The staffing problem exists across all sectors in all settings. Bigger businesses are more likely to use money to address the challenge. In small businesses we have more flexibility in terms of our response. But respond we must, otherwise, we will struggle to retail people let along hire new people when we need.

I am not suggesting we follow the Taco Bell approach. I think that approach is more rooted in decades of minimum wages and challenges in terms of the grind of the work in the business. I shared the Taco Bell story because I saw it first-hand.

Local small business retailers in Australia will need to address the staffing challenge in the way that is most appropriate to their situation and settings. If I was to offer any advice on this it would be be sure to have a plan, because you don’t want to react when facing a staffing shortage that is negatively impacting the business.

Let’s talk for a moment about why there is a job shortage.

More people are able to work from anywhere than ever before;. They can find good jobs, well-paying jobs, working from home. For plenty, this has enabled them to break free from minimum wage and jobs with a high commute cost.

There’s more gig economy work, too. This offers flexibility for people with other demands on their time.

I don’t see these things as temporary.

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Newsagency challenges

What’s the value of newspaper advertising?

Clive Palmer is reported to have spent close to $100 million on advertising during the federal election campaign with a significant chunk of that spent on newspaper ads.

If seats in parliament was the goal, the advertising failed.

While we could critique the ads as being the cause of the failure, the issue could also be the medium.

Is newspaper advertising as valuable as it once was?

We already know newspapers are not as valuable for the once rivers of gold real estate, employment and car advertising.

I am sure people far more skilled than me will dissect the Palmer ad spend and consider what it may indicate for newspapers and their publishers.

I’d be particularly interested in scholarly assessment of the Palmer spend coupled with the clear bias of News Corp in its propaganda type coverage supporting the Coalition parties and negatively covering Labor, and their even more negative coverage of the independents.

From a newsagent perspective, we are part of the distribution channel for print newspapers. The topic should interest us in the context of the role of newspapers in our future. I think this election showed us that newspapers, particularly the News Corp newspapers, are not as important or influential as they have been.

Will this 2022 federal election be something we look back on in the future as a point in time where the value the medium was significantly diluted because the actions of some newspaper publishers demonstrated disrespect for what was once a valued moral authority.

I know of a couple of newsagents who recently moved newspapers from the front of the shop to the rear because of election coverage in their main daily newspaper.

After writing this I caught up with the latest Media Watch …

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Ethics

The cashless narrative

I am seeing more and more retail businesses going cashless. While some make the move without explaining why, others, like this bakery I saw in the US, provide the narrative.

I like this approach.

If it were solely up to me, we’d be cashless in at least 2 of more stores. I am keen to avoid the costs associated with cash: end of shift balancing, banking, making change.

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Newsagency management

Updated advice for new newsagents, those who have bought a newsagency

This is not a complete list. Also, it’s my list. Others will have their list.

Before you get to the list, consider  consider the type of newsagency do you want to run: retail or agency. In my opinion, retail has growth opportunities and relies on you whereas agency is flat or declining with others in control of much of your business. I am more interested in retail.

You drive business value by playing at the boundaries of the business, broadening what you sell, the price points you can achieve and the new faces you can attract. Attracting new shoppers has to be a key focus as this feeds into other metrics.

Plenty of people offering newsagents advice on how to run their businesses and what to stock are not newsagents, not even retailers. Often, they are not business owners with a vested interest in your success. Be cautious about advice offered, especially from supplier reps. Their needs are likely not your needs.

I own the newsagency software company supplying more newsagents with software than all others, I also own the newsXpress marketing group and I own 4 newsagencies. Best of all, every day I get to work with retail experts, retail practitioners. They have the best advice, from lived experience, successes and failures. In offering advice here I’m not trying to make money off of you. The advice is offered free to anyone to read and use or not.

Here’s my updated list for new newsagents:

  1. MAGAZINES.
    1. Arrive invoices through XchangeIT – no other way.
    2. Only sell magazines by scanning. Never use department keys.
    3. Do not label all magazines. Do not label weeklies or high volume monthlies.
    4. When returning magazines, scan out returns. Do this at least weekly.
    5. Do not early return magazines the day they arrive unless you have been sent too many. Often newsagent who early return deny the opportunity of sales.
    6. Early return at least twice a month – based on what is NOT selling.
    7. If you have sub agents – only supply them through the sub agent facilities in your newsagency software.
    8. Check your magazine account as soon as it comes in to ensure you have received all credits.
    9. Pay your magazine bills on time without fail – avoid being cut off for weeks without magazines.
    10. You control where magazines are placed, it is your shop.
    11. You do not have to put posters in the window. I recommend against this.
    12. You do not have to do big magazine displays – it is your choice. I see no evidence of it increasing sales.
    13. I recommend against letting magazine companies set up display unless you think they will help drive sales.
  1. NEWSPAPERS.
    1. You control where newspapers are placed, it is your shop.
    2. If you are regularly undersupplied, complain to the publisher as well as the supplying newsagent (if you do not have a direct account).
    3. Scan all newspapers you sell.
    4. Scan all newspaper returns – accurate data will be your friend in the event of a dispute
    5. You do not have to put out newspaper posters or place newspapers in a certain position unless you have signed a contract with a publisher agreeing to this.
    6. Manage your exposure to promotions where you sell stock for a tiny margin.
  1. CARDS.
    1. Cards have the largest %GP of all physical products you will sell (except coffee if you offer that). Treat cards with the respect that value demands.
    2. Think carefully before signing a contract.
    3. Pay for your own fixtures.
    4. Put out your own cards. Learn what you stock. Take ownership of this most important product category.
    5. Ideally, do your own card order. It’s your money being spent. Don’t leave this to someone else to do.
    6. Agree on an ordering process with your card co. account manager, for example what number of cards remaining in a pocket to order on.
    7. Immediately report any over or under supply.
    8. Trust your data ahead of your gut and ahead of sell-in reports from suppliers.
    9. Pay on time or risk being cut off.
    10. Discount seasonal stock at the end of the season for a couple of days to pick up stragglers and make an extra few $$$.
    11. At least every two years (preferably annually) undertake a range review of sales by pocket based on your sales data, not card company provided data.
  1. STAFF.
    1. Decide on your pay rates. The award is best used as a base guide. It’s likely that to attract and retail good staff you will need to pay above award.
    2. Ensure everyone has a list of things to do each day.
    3. Have a documented position description against which your employees are measured.
    4. Have a written roster every week.
    5. Have a structured process for handling annual and sick leave.
    6. Use payroll software for record keeping.
    7. Pay always on time and preferably by electronic transfer.
    8. Pay super on time. Do not start someone working for you unless they have provided a super account number with their tax file number.
    9. Change your roster regularly for casuals.
  1. STOCK  AND SUPPLIERS.
    1. Every day, look for opportunities to attract new people through what you choose to range and how you display it.
    2. Do not buy for yourself, what you like.
    3. Only see supplier reps who have made an appointment.
    4. If a supplier rep tells you something will be a success, ask for the evidence.
    5. Use your computer system to guide ordering of stock – order based on sales.
    6. Order to a budget.
    7. Scan everything you sell.
    8. Scan out personal use stock.
    9. Set your own mark-up policy for items that are not pre priced.
    10. It is easier to discount than increase prices.
    11. Do not pay for an external stock taker – do it yourself through the year.
    12. Check high theft risk items like weekly or fortnightly.
    13. Arrive and price stock on the shop floor, and not the back room. You’ll sell more this way.
  1. SHOP LEASE.
    1. Negotiate your own lease. Paying someone who is not financially invested in the outcome is likely to not get a better deal for you, despite their pitch.
    2. Read your lease.
    3. Make sure the permitted use clause serves the future needs of your business.
    4. Pay on time otherwise you could be locked out.
    5. Do not agree to a new lease unless you have read the entire document and are prepared to agree to it in its entirety.
    6. Conduct discussions with your landlord in writing to maintain a paper trail.
  1. GST.
    1. Complete your BAS on time and make any necessary payment – to reduce the opportunity for you being audited.
  1. FINANCE AND OTHER MATTERS.
    1. If you borrowed to get into your business, start paying this off from the first week, make progress everyweek. This avoids you having a challenge when you come to sell the business.
    2. Pay yourself a wage or at least accrue this in the accounts.
    3. Integrate with accounting software like Xero – keep bookkeeper costs down.
    4. Ensure workcover (workers comp.) cover is up to date and maintained.
    5. Ensure you have appropriate council permits for what you sell – i.e. food.
    6. Have a structured banking process that ensures that cash is tracked at all steps and at all time.
    7. Take a data backup every day. The best approach is an automated cloud backup – ask your software company.
    8. Bank every day and bank the takings for each day separately to make reconciliation easier.
    9. Use your software to manage the end of shift process to drive consistency and accuracy.

As I said at the start, this list is evolving with time. I hope it is useful to new newsagents and would be newsagents, to understand some of the day to day tasks you cannot afford to get wrong.

Footnote: I first published a version of this advice 7 years ago.

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buying a newsagency

Let’s visit the new Just Walk Out format WH Smith store at LaGuardia Airport in New York

I am grateful for the opportunity to see the new WH Smith store at LaGuardia Airport in New York this week. It was a fascinating experience.

This new-tech store is at the all new LaGuardia Airport opened in February this year. It leverages the Amazon Just Walk Out technology, technology I have covered here for several years now. Here’s the front of the shop.

There is no counter. Once you are in, it’s all product. You enter with a credit card.

The digital screen to the side of the entrance explains the process. This is key to quick understanding of access to the store.

On the ceiling you can see tons of cameras. They, and other tech, are elsewhere in-store, tracking you, so you can just walk out.

Products are displayed in a traditional way for convenience.

There is one exit.

There was one staff member on the shop floor, stocking shelves.

The shopping experience is easier than self checkout in that there is no battle when the scale mis-weighs something or when the self checkout tech can’t work out if you have your own bag.

This WH Smith Just Walk Out store experience was smooth, just what I’m looking for in convenience shopping in a transit setting.

The biggest barrier, besides cost,  to wider use of this tech is the fear of theft. I suspect the tech will evolve to further address this. Also, I suspect they have allowed for this in product pricing. However, I’d note that the pricing of products felt no different to what I have seen in regular c-store retail in US airports.

While I don’t want to come off as a booster for Amazon, they have been leading this tech field for years now, first through their Amazon Go stores which continue to trade, even in street front situations in major cities.

The Amazon tech reduces waste. For example, if a customer takes a product out of a fridge unit and later in the visit puts it on another shelf, the Amazon tech can notify store workers and let them know how long it has been out of the fridge. This is fascinating.

While we are seeing application today in the convenience space and in some Amazon owned supermarkets, I think the real innovation will come from new retail formats built around the Just Walk Out or similar tech. This will come about through promotion of this retail innovation, creating demand for it.

The current cost of the Just Walk Out tech means local retail is unlikely to be an early adopter, I think it’s wise to have it in the consideration field as this tech will become affordable for our types of businesses. It would allow us to change the focus to be more about shop floor help than sales counter anchor.

I would not, however, that key to the success is identification of the products being picked up by customers. The consistency of range on c-stores enables tech partners to make setup easier. Having to collect photos of the quality need and from all the angles needed for less mass products would be a time barrier for plenty of retail settings.

In the newsagencies with agency services like lotteries and postal, of course, this tech is not a solution.

Like I said, I am not here boosting for this tech. My goal with this post is to show that is now out there and to note that some big businesses are behind this tech making its way to many retail settings, starting with c-stores. Its wider release now puts even more pressure on independent convenience focussed retailers.

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retail

Perfecting the digital newspaper and magazine experience for travellers

You’d struggle to find print newspapers and magazines in airport lounges in the US now.

At LaGuardia (New York) airport yesterday, in the American Airlines lounge, I spotted this sign.

Clicking on the QR code takes me to an awesome website offering current newspapers and magazines. The range is extensive.

Once you select the title you want, access is immediate – all without needing to register, login or pay anything.

The copy of the paper is complete with ads.

Checking countries for which they have newspapers, Australia is not listed.

I spent an hour looking through the site, including the magazines, and that’s where I found some Australian titles.

Again, the reader experience was easy. You can zoom in and out with ease – on any device you are using. I tries this on my phone, iPad and MacBook. Such a good experience.

And, yes, in The Australian Women’s Weekly, there are ads.

I was even able to download titles, like AWW, for reading later. It was so easy.

I am surprised at how good the experience is, that it is free and that they ask nothing of me.

There are a couple of aspects to this experience that interest me: more evidence of digital first for what was print media, and, the tech story. The first was a given. But, it has been slow, because of the second. Tech has been slow and while what I experienced in the American Airlines lounge was good, it was not perfect. It was, however, a leap forward from two years ago when I last tried this out.

This is not about the traveller experience though. Well, it is, but looking down the path, it’s about how tech companies and others are removing roadblocks, to make the digital reader experience easier, faster and more personal. It is also about relationships that could be leverages to reach more eyeballs for instant access.

In terms of the tech, navigation is where I’d like to see change.Access is currently linear, like the print products themselves. I’d like more diving by topic, breaking stories free from mastheads. But, of course, that dilutes the value of the mastheads in the eyes of the publishers.

If you think about it, the print media distribution model was always destination shopper driven and distribution was always focussed on. this: newsagencies, home delivery etc … driven by the person who wants access to those products. The person has to know about the product and either want it or be curious about it.

The airline lounge experience is for the passer-by with some time available to read, it’s for the impulse shopper, the passer-by. That’s a different ‘shopper, and, potentially, a more valuable shopper for publishers into the future.

As publishers, and tech platforms, finesse their offerings, they will be more easily able to reach more of these people. I think partnerships will help drive this, using the masthead content as a value-add. This is where we will see more disruption.

That model, that future model, could / should be about stories reaching out to people, reaching more people, and not being accessed in a linear way.

I’m not doom and gloom for the newsagency channel based on what I have seen. This innovation, and what will come, are inevitable. Publishers are evolving, just as we must.

While I am sitting here in the lounge writing this, I am sat next to a large digital screen promoting an American Airlines / Oprah Book Club, Apple TV+ partnership through which I can watch Oprah interview authors and access those books to read while flying.

It’s the era of partnerships baby, and tech for what was print media!

So, where do we fit into all this? Today, if we offer print products in our shops, and not all of us do, we need to offer the best experience. And, while we do this, we need to evolve new traffic attractors, to bring more people. The best thing we can see in our newsagencies is new faces and the best experience is when they come back, again and again. Achieving that is 100% up to us as retailers. It’s not something agents would do.

The biggest risk to our newsagency channel is the newsagents who are not evolving, the newsagents who prefer to remain agents and the suppliers who encourage and enable them.

Postscript. It’s now 8 hours later and I’m in Wisconsin. I thought I’d try and access another title. Sure enough, access is locked to the WiFi at the American Lounge I was in.

It makes sense that access to locked to the location. It also underscores the opportunity of this tech to help publishers engage with new audiences.

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magazines

Strong interest in environmentally friendly stationery

I have tested a range of products on social media over the last few months, to gauge interest in products pitched as environmentally friendly.

In my experience, pitching a product with a positive environmental story will see that post reach more people, usually 3 to 4 times more people.

Here are two recent products I have see this happen with.

The pitch in each case was simple … noting we are grateful to be able to offer these products.

For a retail channel with some less than ideal environmental credentials, like paper wastage from unsold magazines for example, products like these can be helpful in adjusting the narrative.

In our own social media engagement we tend to seek out products like these rather than featuring products that more often get time in the sun.

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Social responsibility

Surging gift packaging sales in the newsagency

After purchasing the business late last year we replaced the gift packaging supplier, moved the category from the rear of the shop to next to the counter, to be the introduction category to cards, and, we replaced the fixtures with a more modern and easily shopped approach.

Here’s what it looks like.

Sales are up more than 250%. The inventory investment is up 10% and the space investment is the same.

While most of our customers are individuals, we do have some corporate customers. Wednesday last week, one corporate customer came in and bought 15 bags … because they noticed the range when shopping for something else.

The balance in the range is key we are finding. By balance, I mean the offering of bags, roll wrap, sheeted wrap, flat wrap and premium tissue. Enough people do invest in how the gift looks enough for us to offer what we offer.

Being literally next to the counter is good in that we can easily help shoppers see what they may be missing. Previously, this location had a segment of cards that was not doing so well.

The glass shelving enables us to keep the display looking tidy. It also makes the product stoppable.

There is nothing unique here, nothing that can’t be easily copied.

This is a Field of Dreams move. By that, I mean it’s something that will attract shoppers. You know, build it and they will come. The fresh range of gift packaging is attracting net new shoppers thanks to the ease with which it can be seen, word of mouth and our social media posts. It’s one the threads of our new customer strategy, which I wrote about here earlier.

What makes the focus on gift packaging more important is the margin. It’s more than 60%. The turn rate is such that this category is one of our top performers, which makes it cash flow beneficial. These factors all matter.

Too often suppliers neglect to pitch on stock turn. to me, stock turn is as important as margin. Get the two right, and in sync, and you have good times.

We are thrilled with the result of the bags and are grateful to be working with a supplier who has so willingly and engagingly partnered with us on this project.

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Newsagency management

We need better reporting of federal election debate over the minimum wage

You’d think it’s the end of the world as we know it if there is a $1.00 an hour increase to the minimum wage based on the ‘news’ coverage of this debate. Across a range of media outlets business lobbyists, conservative politicians, retailer representatives and some retailers themselves have been saying how awful such an increase would be.

Yesterday, on ABC radio Melbourne and 3AW there were retailers saying products had gone up 200% and 300% and other costs had gone up and a $1.00 an hour wage increase would eat into margin.

Gee, I wish there was fact checking of these claims.

And, I wish there was more comprehensive questioning.

And, if there is a case, it would be good for transparency around the details.

Pretty much every retailer I know has has signed a lease agreeing to an annual 5% increase in rent, sometimes more. That’s right, they contracted this 5% rent increase to be annual.

So, here’s my question? If people make a business, as so many retailers say, why would there be any hesitation on a 5% increase in pay for people … for without them, there may be no business.

Like, why agree to an annual locked-in 5% increase in rent costs but not labour?

A business on a knife edge that goes under for a $38.00 increase in the cost of an employee for 38 hours in a week is a business with a problem anyway.

People on the minimum wage are likely to spend what they earn. That helps the economy. That $1 an hour is beneficial for the economy.

We need smarter journalists who ask more thoughtful questions and who challenge selfishness. I want to hear the retailers asked about paying more rent every year and how they justify this while not wanting to pay their valued employees more every year.

It would be good to sit with a retailer who says they cannot afford the extra $1 an hour and unpack their business numbers from P&L back through inventory data, roster decisions … all decisions that gets the business to the point where $1 an hour is not affordable.

Sure, I want my business costs to fall. And, sure, I want to make more money. The reality is that we are all participants in this one economy. Constant squeezing that the bottom end is bad for those being squeezed, the economy and society. We should care about that.

As for the claims about products costing more. Some do cost more. But they cost more for everyone. There are smart ways to deal with product cost increases. It is lazy to complain. It is appalling to suggest that because of those cost increases you should not pay your employees more.

I appreciate my take will upset some. That’s not my intention. I want an intelligent discussion about wages and business costs, so that all participants understand the facts and, hopefully, through this better understand more sides of the debate on wages.

But, let’s think for a moment, how could small business retailers respond to a $1 an hour increase in labour cost?

The best response is to engage with it on the shop floor. Here are my suggestions:

  • Make sure everyone working in your business understands the numbers: where you make  money and where you do not make money. Yes, this means being open on the business numbers. A couple of decades ago there was a movement led by the awesome Jack Stack, Open Book Management, it helped turn plenty of businesses around. The more those working in the business understand the numbers the more likely they will work with you.
  • Show the connection between what the business makes and what they make or could make through more hours or, even, a bonus(!!).
  • Set goals for the business and people in the business who can make a difference to the business performance.
  • Make decisions based on evidence for its is these decisions that make local retail shops more money than gut decisions.
  • Drive your overall business GP. The higher that is the more you are insulated from increases in your two biggest cost areas: labour and occupancy.
  • Think about each decision through the prism of: does this position me better to deal with rising costs, including rising wages costs.
  • Turn around and look back into your business for it is likely there are things you can do right now to improve your position. Here is the most easy move: look at inventory you have on the shelves that has not sold in 6 months or more. It’s dead stock. Dead cash, unless you sell it for something. Mine your business data and find opportunities like this.

I could go on. If a $1 an hour increase in labour cost bothers you, confront it as a business opportunity rather than a pure negative. It’s a door opening opportunity I think.

It frustrates me that the wages debate is a debate, with sides. All of us in business benefit if more people in the economy, our economy, have more money to spend, especially if they are in the cohort likely to spend money. If we could all talk about this without taking firm sides we’d have a better opportunity of navigating a path forward we are all happy with.

23 likes
Ethics

The newspaper distribution mess in Melbourne leaves Melbourne airport without papers til 7:30am …

Update (12:26): we’ve had customers coming in saying there was coverage on this topic on 3AW today, which surprises me given they are owned by Nine Media, one of the companies responsible for the mess.

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Newspaper distribution

Can we sell a $3,750.00 item in a newsagency?

Yes, we can, and we do, and we did within 3 hours of having the item.

Coins attract loyal, valuable, shoppers.

We sell mint coins from $15.00 through to this magnificent piece. But this post is not about coins, not really. It’s a bout what is possible in any local newsagency business.

What we used to do should not define us.

What we like, or don’t like, should not limit us.

Who we see in our shops or on the street outside should not limit who could shop with us.

What we sell today should not limit what we could sell tomorrow.

What you sell in your shop is up to you. All it takes is one unexpected success to brighten a path forward.

Too often, I see newsagents limiting their view of what they could achieve in their business, because of advice from an accountant (who is not a retailer) or advice from a bank manager (who, also, is not a retailer) or from their own view of what their business is.

Today’s in 2022, there are no boundaries, no rules, no limitations.

Your newsagency can sell anything. What it sells is up to you.

The challenge for our channel is that since forever we have had suppliers telling us what we can and should do, suppliers defining our borders and being paternalistic about decisions we make and about how were run our businesses. For too long too many in our channel have been happy to be agents rather than retailers, happy to be told what to do rather than to lean into free will and consider what we could do.

While many in our channel have found their way out of the agent world, too many are still in there, still chasing a few bucks they could win from a supplier for a good display of low margin product, rather than chasing many more bucks from, you know, actually selling higher priced and better margin from that same supplier requested display space.

My point is, if you are still reading this (thank you for that!), this $3,750.00 coin sale is no longer unusual for us. The first one did open my eyes. Like so many things we have tried in the past, we learnt from it, leaned into it and found more gold on the pathway. Any newsagent can do this. With the right relationships, capital is not a barrier.

And, my experience is not alone. I know of plenty of newsagents with sales outside of what has been traditionally, sales that caught their attention and propelled them to more change in their businesses.

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newsagency of the future

Using TikTok to reach a target audience and have fun with a competitor

The youth team supporting Dr Monique Ryan in Kooyong released this TikTok that comments on the plastering of the Kooyong electorate with posters, billboards and walking billboards supporting Josh Frydenberg.

@youth4mon Can’t escape it 🙄😨 #youth4mon #election2022 #auspol #fyp #kooyong #foryoupage #mon4kooyong ♬ Josh – Peach PRC

What’s this got to do with newsagency? Okay, TikTok is an interesting platform through which you can reach a demographic that is likely not shopping your shop. The team behind this and other video is reaching out to an audience important to the electron campaign. It’s also an audience we need to better connect with.

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Newsagency for sale

Motor magazine to close

Wheels Media recently announced that after 68 years, Motor magazine is to be closed. The July issue will be the last.

Someone needs to update the website.

MOTOR is now in a stronger position than at any point in its recent history. We continue with the printed page not because we have to, but because we want to. It’s an integral part of who we are and it reaches a different customer with different motivations than online journalism. What’s more, the magazine is growing in size, with better quality paper and a bigger editorial budget to bring both retail and subscription buyers alike a truly premium experience.

Fun fact: old issues of Motor magazine sell well, and for a good price, online.

1 likes
magazines

The dire situation facing the McColls newsagency business in the UK is a reminder of the challenges of the convenience model

While I am not privy to the financial details of the troubled 1,265 store UK McColls group, I have been in plenty of their shops, and other similar shops on the UK high street.

They identify as newsagents, like the other similar businesses. Convenience stores for sure, but newsagents, too. There is nothing unique about their businesses, nothing special.

This is what many businesses in the UK newsagency channel did years ago, they evolved into convenience businesses. I have written about it here before, in the context of some in the Australian newsagency channel referencing the convenience model. I am on the record with the opinion that convenience does to offer a good future for any independent small business retailer.

The challenge with convenience is that it is a mass driven model, dominated by huge suppliers hungry for mass sales. Scale is everything, and this starts with scale in terms of retail fleet. It’s why in the UK the supermarket chains dominate the convenience retail offering, making it hard for any smaller group and almost impossible for independent retailers.

We see the convenience model evolving here in Australia with the major supermarkets playing with their models and, in some states, opening more outlets. 7-Eleven is strong, and they offer abroad range of products. Petrol outlets are evolving too, with plenty offering more magazines and cards than some local newsagents.

Here in Australia, as in the UK, I see no upside whatsoever for newsagents in the convenience space. It’s price driven – meaning you have to buy as well as the big businesses. Convenience shoppers tend to not be as loyal, not destination shoppers.

But, hey, these are my opinions. What local retailers do is up to them, of course.

The local convenience model is facing several new challenges. Quick commerce is trying to attract the convenience shopper. These are businesses like Milk Run, which offers home delivery of convenience and supermarket lines within 10 minutes. They are eliminating the shop altogether from the convenience experience as they supply through dark stores. In the US you have Uber eats, InstaCart and Deliveroo all spending up in this space.

There appears to be no shortage of investors happy to throw millions at this latest innovation impacting convenience retail, offering another warning sign to any local independent retailer, like a newsagent, considering the convenience model as viable business move.

The news today that McColls is reportedly close to collapse is not what anyone in retail wants to read. And, possibly, their situation has little to do with choice of model. But, we only have to walk down any UK high street to see the cannibalisation taking place, the money being invested to churn customers from one shingle to another. There does not appear to be much investment in growing the market, just a battle for cash in that market.

While the McColls news can feel distant to our local retail businesses in Australia, I think it is a reminder of the challenges of local retail and the need for each of us to know what we stand for in our businesses, to know what differentiates us, and to ensure that this is an appreciated value proposition.

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Convenience retail

4 things any retailer can do to improve cash flow

I released this video, 4 things any retailer can do to improve cash flow, on my POS software company’s YouTube channel less than 2 days ago and it’s had 243 views already. This is a surprise because the videos I make tend to attract time number of viewers over several months. They are not made to attract good numbers quickly.

I am sharing the video here because of the high number of views (for this type of video) and the feedback from retailers about the advice provided.

I made the video after publishing a longer list of advice for retailers on improving cash flow:

  1. Free dead stock. In our experiences this releases the most cash flow value, but it is the option most often rejected for often silly reasons. dead stock is stock that is not selling, not moving. It is often stock you have long since paid for. This means that any money you get for it is positive cash flow right now. The loss from paying for the stock has already been realised – many retailers forget that. So, idea tidy what’s not selling, and quit it creatively, with urgency. Cheer every dollar this brings.
  2. Trim where you can without impacting sales. The most beneficial move here is typically a cut in the roster, a cut in labour cost. Save a few dollars with no sales revenue impact and you are ahead cash flow wise.
  3. Get shoppers to spend more in a visit. Smart loyalty software will do this. Points loyalty systems are unlikely to do this. There are better loyalty options designed to help encourage shoppers to spend more in a visit. Our POS software helps nurture this.
  4. Charge more. Yes, we understand this can be scary. The thing is, if you do this carefully, thoughtfully, and offer a good loyalty incentive and bundle items together, a modest price rise is less likely to be noticed and more likely to have a positive impact on cash flow. Think about it. Plan for it. Take small steps. A 1% rise across your top 200 inventory items could be the small step that delivers the cash flow boost you need.
  5. Find more customers. The more new customers you have shopping with you the more you will sell, obviously. It can feel easier said than done to attract new customers. In our experience, most local retail businesses do not have a new customer attraction plan. Do you? It does not need to be complex. Even a simple social media pitch honouring a new product, reflecting your gratefulness to have it could be enough. One the post is up, pay for a boost in your area. An $8 spend over 4 days is all you may need to get in front of a few hundred prospective new customers … and that gets you on the path, that could be your new customer attraction plan.
  6. Trim overheads. Look through your business overheads and look for an opportunity to trim.
  7. Look at your sales counter. With most purchases being completed at the sales counter, look at it from the perspective of your shoppers and see what you could do to encourage them to add items at the last minute. The counter is a valuable place of influence. Use it. Make sure it is driving deeper purchase baskets, and adding to cash flow.
  8. Spend less on inventory. Look for suppliers with good inventory holdings that allow you to use them, rather than your shop floor or store room, to hold stock you may not sell right away.

My concern is that too many retailers will not do the work, they will not take the important steps to address cash flow, until it is too late.

Through the work I do at Tower Systems and at newsXpress, I try and encourage retailers to confront the truth in their business data sooner and with tighter focus that might otherwise be the case.

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Management tip

Wow, Easter!

Looking at data for several newsagency businesses and comparing 2022 to 2019 (pre Covid), easter card sales are up between 40% and 100% – it varies by location. 40% up was the lowest result from this small dataset.

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Greeting Cards

Speculation about interest rate rises impacts consumer confidence

So many Aussie media outlets trade off speculation, especially speculation about economy-related numbers, like interest rates.

For several weeks now it’s a lead story for many news outlets, speculation about an interest rate rise, with many expecting the Reserve bank board to make a decision at their monthly meeting tomorrow.

The volume of the speculation makes the possibility off interest rate rises a topic of discussion in retail. The speculation worries people, it negatively impacts consumer confidence.

I wish news outlets would stick to reporting news, and stop covering speculation as if it is news.

Here in our local small business newsagencies, we can’t control interest rate movements, but we can buttress our own businesses to enable them to be less impacted by interest rate increases. There are plenty of moves we can make so our businesses rely less one month that has an interest cost. We can also not engage with the speculation in-store or on socials.

Consumer confidence is vital to local retail, especially in these mid-year wasteland months.

I have been thinking about how small business retailers can deal with interest rate rises when preparing advice for my POS software company customers recently. Freeing up dead cash remains the most vital, and immediate, move any local retailer cam make:

We help retailers free up cash in their businesses. And, this can help reduce their reliance on loan funds, which means a lower impact of rising interest rates. now, how do we help retailers free up cash. We do this in a range of ways, through smart tools in our POS software. We helped one business release more than $20,000 of hitherto dead money. The released funds helped them reduce their overdraft and that reduced the amount of interest the business was paying. It all comes back to using business data.

If you are concerns about the speculation, it’s better to act rather than amplify what might be.

3 likes
Newsagency management
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