Australian Newsagency Blog

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Growing card sales in newsagencies is valuable business given the margin and responsiveness of cards to  engagement.

The store for which the graph has been produced as part of a deep dive to the pocket level into card performance and done without card company engagement, has achieved excellent growth while at the same time reducing space allocated to cards and reducing the capital invested in cards. This is a win, win, win … an extraordinary result.

The key for this business has been data. Every decision has been based on evidence, data. Every decision has been subsequently tested, by data. Decisions that have not worked as well as needed have been replaced or adjusted, guided by data.

My point is, newsagents can sell more cards, make more money from cards, by leveraging their own business data.

Pitch warning. This is a newsXpress initiative. It has developed comprehensive intellectual property that leveraged data from the Tower Systems software, overlays this with pocket and caption data and then produces the most thorough card performance analysis you will find. It covers cards on the wood as well as spinners. It is fearless when considering suppliers.

The intellectual property has been tested in plenty of stores and in every single case, double digit growth in card revenue has been achieved. Oh, any double digit growth, I mean anything between 15% and 60%. Usually on the back of no additional capital investment.

I doubt a card company itself could achieve this since the analysis that feeds the business decisions I am talking about it from the store level. Card companies know what they sell in and what they take back as returns down the track. It is the over the counter sales data that is key. Also, if you have more than one card company, only your data can be useful in a whole of business view.

Card sales are up. Not just because of what I am writing about here. They are up generally because people are connecting more. Smart newsagents are leveraging this, riding the wave to maximise the opportunity its for their business.

The work behind the results I am writing about here is considerable. But so, too, is the financial reward. And, the reward travels beyond card revenue since happy card shoppers add other items to their basket in a visit. This is the icing that is so valuable.

The Source newsagency in Melbourne was lauded fifteen years ago as an innovative newsagency. It offered a fresh approach back in the mid 2000s. In recent years it was not as innovative. I was in the city Monday and stopped by The Source and discovered it had closed.

After following the online trail from The Source to its ‘sister’ online shop NoteMaker I then find Milligram, a group of several stores in the stationery space. It’s at Milligram where you can see retail innovation in stationery and associated categories. It’s worth checking out.

A colleague shopped one of the Millgram stores this week, in Chadstone., They were very impressed. They said the store is a representation of several leading niche retailers in this space in the US.

There is a sameness to Mother’s Day gifts pitched by traditional newsagency suppliers. We have been pitched their products for years and, over that time, they have not evolved much.

We are grateful to have non traditional newsagency suppliers who offer different product through which we can pitch a freshness.

This photo is one of the displays of non traditional Mother’s Day gifts. None of this product has been bought for the season, but it works for the season. Shopper reaction has been terrific.

These core seasons in our channel are changing, offering us opportunities for change in-store.

I was at the Sydney Gift Fair a few weeks ago representing newsXpress, the newsagency marketing group I own. I connected with several suppliers in niches not well represented in the newsagency channel.

The good news is that each has agreed to supply newsXpress stores. While this is good news for newsXpress members, it is good news for the suppliers as it opens their unique products to a new retail channel.

That the suppliers quickly got on board is a change. In the past, prospective suppliers have taken months to agree to sell into the newsagency channel, primarily because of how they remember newsagency shops and not because of what they see plenty of them as today.

The other interesting factor here is the price range. Most of the new products are priced at $100 to $500. While our channel has historically done well at the low end gift and homewares price point, we have not done as well as we could at the higher price point end. Hopefully that is changing.

For many years I have urged management at Ovato, formerly Gordon and Gotch, to provide newsagents with the ability to control their own magazine supply. My argument was that giving newsagents control over range of titles and quantities received would see newsagents stock and sell more magazines.

The historic master / servant relationship with newsagents got in the way.

The leadership of Ovato did not like the idea and did not deliver this. They have maintained a system through which it is difficult for newsagents to manage their magazine title range and the quantity of inventory received. And, despite having access to accurate sales data, this appears to play only a moderate role in supply decisions within Ovato.

Magazine publishers should be frustrated buy this and here’s why …

For decades, newsagents could not easily choose the greeting cards they stock. The card companies had an antiquated and opaque process, that newsagents, for the most part, were happy to go along with.

Over the last two years, several major card companies have provided newsagents with complete control over ordering, including the ability to replace one design with another.

Looking at comprehensive pocket level before and after sales data, I am confident in saying that providing newsagents control over what card designs they stock is a key factor in above average growth in card sales. I am talking here about 20% and more year on year card revenue growth – even with the Covid period sliced out of the data.

The data study I have undertaken included businesses that did not change card suppliers – those that controlled what they stock grew revenue several times more than those that did not.

The message for magazine publishers is simple – if you want to grow magazine sales in the newsagency channel, give newsagents full control over what they stock. In my opinion, the failure of Ovato to enable this has held back magazine sales opportunities.

Are magazine publishers frustrated? probably not since they do not actively engage with newsagents. It’s one-way and sales of their titles suffer as a result.

Thankfully, some card companies have realised the commercial value to them from giving retail newsagents more control over what they stock. Kudos to them.

There was a time when ink was massive for newsagents, with plenty of businesses turning over more than $10,000 a month, achieving excellent margin and doing this with minimal capital invested in inventory.

I know because around ten or so years ago out the back of one of my shops we were doing $350,000 a year in in sales.

Today, the ink market is fundamentally different.

Printer companies are selling more larger capacity printers, reducing the sales of ink in the first year or two.

Printer companies are launching printers, and associated cartridges, through major retailers, cutting out independents.

Margins are lower.

Shoppers are more price sensitive thanks to major retailer campaigns and thanks to more online businesses in the space.

Price sensitive shoppers are not loyal, making revenue from ink less predictable than ten or more years ago when ink did well because of in-store knowledge and service.

Should newsagents get out of ink? Has the category run its course in the channel?

There are plenty of newsagents doing well with ink. They are usually in regional Australia with a somewhat captive local market. However, the number of newsagents doing well with and making money from ink is considerably lower today than ten or so years ago. That’s what suppliers say.

Like anything in business, let your data guide your decisions. Consider your capital, labour and retail space investments against revenue over a year and assess this against alternative use of those assets.

Whereas ten or so years ago we could confidently say that every newsagent could do well with ink, today, that statement cannot be made.

Newsagents have the best range of Mother’s Day cards in Australia. They have the fringe captions – Nan, Nanna, like a mum, and more. It is these fringe captions that can play a role in driving growth in Mother’s Day card sales.

Fringe captions provide opportunity.

Check out your range and select fringe captioned cards, like Nan and Nanna and give them a pitch on social media.

Too often I am seeing social media posts of a full stand and while that speaks to range, it fails to entice on real specialisation. That is where pitching the fringe captions is key.

People give a social media post a couple of seconds. A photo from a distance of a range is less like to entice than a photo of a single product up close in my experience. Mother’s Day gives newsagents the opportunity for the up close single product pitch.

There has been some confusion in media coverage in Victoria over the last couple of days on the modified contract tracing requirements released by the state government.

the requirements themselves are not confusing. It is some media outlets that have created the confusion.

Retail is exempted, as outlined explicitly here:

(9) An employer is not required to comply with the records requirement in subclause (7):

(a) where they are operating a Work Premises which is a market, market stall, a retail facility or retail shopping centre with respect to customers who attend that Work Premises, where it is not practicable to do so; or …

I was contacted by a newsagent yesterday who wanted my take as they thought they had to have a QR code setup at their entrance while a staff member said they did not require it. each had heard it from a different media outlet.

The regulations from the Chief health Officer are easy enough to follow.

Push-pops sell well thanks to the evolving range available from a diverse mix of suppliers and thanks to our ability too pitch these products to a broad mix of shoppers. From kids to people in their eighties, push-pops are fun and they also serve a health opportunity. It is this latter use that has them more widely used than traditional fad products.

While pitching them at the counter works a treat, we have also seen them work well with newspapers, weekly magazines and, especially, next to crosswords and it is the crossword shopper who gets them most easily from what we have seen.

This fad has a way to run, but be careful on the inventory you hold as like any fad, it will wane.

Tip: pitch the fun and the health value on social media as the right pitch will bring shoppers in to purchase.

A representative of card company, and through them the card company itself, pressured a new owner of a newsagency into switching to their products from a successful incumbent a while ago. A year on, the move was shown to be a failure.

Card sales declined significantly.

Proving it was not a business problem, the rest of the business performed well.

The change pitch was you’ll do better. It’s been put to me that the pitch was pressured. If true, this being applied to someone new to our channel and new to cards, there is an ethical question for those involved.

For what it’s worth, I suggest retailers get every supplier claim / promise in writing from them or at least diarised by the retailer – with a date and time.

In the case of the newsagent above, evidence could be presented in an appropriate forum for a compensation claim that could amount to thousands of dollars of lost gross profit.

Now, some notes about this. The new owner did not know the incumbent company at the time was successful because they did not look at the data. Nor did the representatives of the card company agitating to win the business. from what I understand, their approach was high pressure and heavy with claims of greater success.

Now that the newsagent is no longer new and have learned the value of business data, they understand the cost of their decision. It’s not a good situation for them. It could have been avoided had the representative agitating them to change been ethical.

Of course I am not sharing anything whatsoever that enables identification of the newsagents, the card company or their representative. but, as happens with our channel, I am sure the story will make its way around. I am not the only person with knowledge off what happened here.

Here are my tips relating to what this story is about:

• Get every claim by a prospective supplier in writing.
• Ask for evidence supporting any claim they make.
• Keep notes.
• Hold them to account for their claims.
• Free stock is no benefit unless it sells easily.
• Anyone giving you cash or something else that could consider is valuable will be repaid by you in some way.
• Read every contract carefully.

The costs to the business I have written about are real and someone, or some people, working in our channel know what their pressure led to for the owner. Shame on them.

Karen Randall’s explanation of how Powerball works had Karl Stefanvoic on the Today show curled over with laughter on TV last week is an excellent segment promoting the channel:

Karen, from newsXpress Robina, is a regular on the Today show when lotteries jackpot.

The Daily Mail had considerable coverage on the story.

Myth making in the age of the #ANZAC industry. This attempt to spin some heroic fake news by @westaustralian to sell papers is appalling.
The “veteran” turns out to be an anti-lockdown, One Nation staffer, who is not a veteran at all.
Just shameful, all round. pic.twitter.com/XfXOS2rZSP

— Francis Leach (@SaintFrankly) April 25, 2021

Every few days I hear from newsagents complaining about how broken newspaper distribution has become, leading to late papers, lost customers and a higher cost for small business newsagents dealing with problems caused by the changes.

This email is one example of the News Corp. related mess:

As we are starting week 2 of the new courier company our papers were once again late. I rang XXX newsagency (as they get their papers just before us and is about 25 mins away) they told us that the van left at 5am from XXX. It took one hour and fifteen minutes to get here to YYY newsagency ( which should take less than 25 mins) We spoke to the delivery driver who said he was doing other deliveries before he dropped off our papers. We received our papers at 6:15am. This is not good enough Its hard enough to run a small business at the moment, we are having regular customers stop their deliveries and the early risers are not coming into the shop. Our paper delivery people have other jobs which means We have to do the deliveries. That causes a flow on effect to all home deliveries and our out of town paper deliveries. We may just be small but we matter. Sunday they got here at 5:15 I wonder if that was because they had no other deliveries.

While Thera are some in News Corp. doing their best to address issues like these, the company is weakened in the circulation management area. It is but a small shadow today of the strong circulation and considerable circulation management resources of years ago.

While never-ending falling circulation is driving the company ‘s commitment, or lack thereof, to circulation resources, it fails to adequately support newsagents.

Note: I removed identifying information as this note could relate to plenty of locations where News Corp. has messed with what was a working system in pursuit of their profit or something.

Australian owned greeting card company Henderson Greetings has secured the rights to the Bluey licence for greeting cards, gift wrap and gift bags.

The BBC have elected to work with Henderson Greetings as primary licensee including exclusive distribution rights amongst Australian newsagencies, dedicated greeting card retailers, department stores, kids retail and more.

This is a big deal, a big win for our channel given the Henderson focus on local retail.

I urge small business retailers to take care when selecting an individual or business to undertake Shopify web development. Inside the Shopify web developer ecosystem there are people who take the money, do the bare minimum and run – failing the retail businesses that paid them.

How do you spot a Shopify web developer who is not likely to serve the needs of your retail business? Here is my advice …

Look at their quote. Is it professionally laid out? Is it well written? Is it understandable? Is it complete? If it is none or only some of these things they may not be the developer for you for if they take this approach representing themselves what approach will they take representing you?! we say … be particularly concerned about text based quotes.

Look for understanding. In their words there should be indicators that they understand your needs and that they want to understand your needs. The website is all about you and your business after all.

Speak to them. We have seen shonky web developers void this at all costs. Speak to them. Talk with them. Engage in conversation. You are looking for someone you can trust your business with. Speak to them.

Look at them. Ask for a Zoom meeting, so you can meet face to face. Ask them to show you sample Shopify sites in this meeting and to explain why each is a good sample site for you to consider./ Sometimes we see web developers avoid Zoom meetings so they can hide behind typed words. face to face c an be revealing.

Say you don’t understand. Tell them you don’t understand some or all of their pitch. Test their patience. See if they meet you at a tech jargon level that you are comfortable with. Challenge them. test them. It is vital they use words and terms you understand. They haver to meet you, not you them.

Be in control. You are the customer. You choose the web developer you go with. decide whether you accept their quote and their terms. You do these things when it suits you. Do not succumb to pressure as anyone pressuring you on timing may be serving their needs and not yours.

Website development right now is like the 1800s gold rush – fast, unregulated with a lot of people being negatively impacted along the way and only a few finding gold.

Take your time. Be sure of what matters to you. Choose the business you want to work with, they business you think can hell you achieve what you want.

Know that you get what you pay for. by that we mean … some web developers under quote as a business model either because they will cut corners or because they know they can charge extra for what they did not know at the start. Again, take your time, be sure of your needs, and remember the carpenter adage: measure twice, cut once. Time spent before you make a decision on your Shopify web developer could ensure that the outcome is better for you and your business.

My newsagency software company has been developing websites for retailers for years. here are some of the more recently completed sites:

www.backobourkecollective.com.au
www.inspiretasmania.com.au
www.brindabellastockfeed.com.au
www.heavensabove.com.au
www.loavesrobe.com.au
www.masterjewellersonline.com.au
www.chitchatgifts.com.au
www.eidsvoldrural.com.au
www.forevergiftsandmore.com.au
www.funporium.com.au
www.goulburnstationery.com.au
www.rehfisch.com.au
www.merimbulaextra.com.au
www.morganpark.com.au
www.nextragiftsorange.com.au
www.northsideproduceagency.com.au
www.pamperedpetz.com.au
www.www.paperplayonline.com.au
www.parkesnewsandgifts.com.au
www.rivercitypets.com.au
www.smithstreettraders.com.au
www.sprengersruraltraders.com.au
www.hefeedshop.com.au
www.shop.newcastle.edu.au
www.toyworldcanberra.com.au
www.toyworldwauchope.com.au
www.reasureboxgifts.com.au
www.uncletomspps.com.au
www.warragulpetemporium.com.au
www.welbygardencentre.com.au
www.wollongongbikehub.com.au

Regulars here will know that I am over calls for things to get back to normal. They never will. The future is not the past. More people are working from home that ever. Businesses, especially knowledge based businesses, have migrated and even more are migrating to remove work.

Click here to see a video of a discussion with the CEO of Dropbox in which he discusses this is the contact of his business, how his business now operates and how he now operates. It’s about the future of work. I found it fascinating.

I was grateful to find this range of unique handmade dolls that represent greater cultural and ethnic diversity than has been traditional in dolls.

Chasing volume sales is not always the priority when choosing items to offer in local indie retail. That is the case with this unique range of interactive dolls.

Customers comment about the range. We know they are something discussed outside the shop.

Having several niche product ranges like these dolls helps position the business outside of what is traditional in the toy / kids gifts space. It’s positioning we have sought as we build on the local indie retail narrative.

It’s hard work finding and stocking genuinely niche products, but it’s worth it in our experience.

Brendan Hill, CEO of Are Media is leaving the company. This, from Mumbrella:

Jane Huxley replaces Brendon Hill as Are Media CEO April 22, 2021 2:03
by ZANDA WILSON
Are Media has announced the departure of CEO Brendon Hill, with former Spotify, Pandora, Microsoft and Fairfax executive Jane Huxley appointed to the role.

Huxley will start on 26 April, with Hill revealing the change follows extensive recent discussions about the company’s future strategy with the board.

Hill said: “The board and I have been discussing the future strategy for the business and the opportunity to accelerate the growth in digital.

“Following the integration of Pacific and the development of a new strategic plan for the combined Are Media group, this is the right time for me to step aside and make way for a leader experienced in digital transformation.”

Huxley was most recently Spotify’s regional managing director, covering Europe, the Middle East and Africa. She also spent time with Microsoft and Fairfax, and was the founding managing director for Pandora in Australia and New Zealand.

Are Media chairman, Clark Perkins, thanked Hill for his time with the company. “Brendon has done an excellent job at Are Media, especially the integration of the Pacific Magazines business, managing the business through COVID 19, and in crafting a new strategy for 2021.

“The business is very profitable and is delivering excellent results, and we are in a strong position to perform even better over the coming years.

Perkins added: “The board of Are Media is eager to sustain the excellent combined publishing platform that has been established under Brendon’s leadership and to accelerate the growth of the digital business.

“The key pillars of the business in women’s entertainment and lifestyle, food, homes, motor and industry all have significant opportunities to grow and develop both their traditional media and digital audience reach. We are delighted to have attracted a leader of Jane’s calibre to lead the business.”

Hill has served as Are Media CEO since 1 June, 2019 (then Bauer Media), when he took over from Paul Dykzeul.

Dykzeul spent two years in the role, which was previously held by Nick Chan for a period of just over 12 months.

It’s worth checking out the changes to casual employment terms adduced by Fair Work that are now in force thanks to amendments to the Fair Work Act a few weeks ago. This section may be of interest:

Becoming a permanent employee
The Amendment Act adds a new entitlement to the National Employment Standards (NES) giving casual employees a pathway to become a full-time or part-time (permanent) employee. This is also known as ‘casual conversion’.

An employer (other than a small business employer) has to offer their casual employee to convert to full-time or part-time (permanent) when the employee:

• has worked for their employer for 12 months
• has worked a regular pattern of hours for at least the last 6 of those months on an ongoing basis
• could continue working those hours as a permanent employee without significant changes.

Some exceptions apply, including:

• small business employers>/li>

• if an employer has ‘reasonable grounds’ not to make an offer to a casual employee for casual conversion.

It is important to read the changes in the context of your specific situation. If you have less than 15 employees, some changes do not apply to you.

With Anzac Day on a Sunday this year and retail not permitted, in most states, to open until after 1pm, I suspect some newsagents will not open at all. Sunday is an expensive day to open labour cost wise. The reduced hours for the day as well as decisions by other nearby retailers will be a factor.

I was talking with a couple of retailers yesterday and they have decided to not open at all, instead pitching it as a move out of respect for the day.

The $50.00 a hour labour cost for adults is prohibitive. While newsagents are exempt and can open, you have to question the value of this with almost all other shops nearby being closed. the value of leveraging the exemption and opening depends on what you will sell as newsagency traditional lines wool;t deliver the margin dollars to justify the cost for most.

The Sydney Gift and Life Instyle Fairs held over the last few days were small, tiny compares to past years (except for 2020 of course) but they were valuable to attend.

Suppliers were happy to see retailers. Plenty reported excellent sales.

I picked up several new suppliers, who have never traded with newsagency related businesses. I also got to re-connect face to face with some existing suppliers.

I liked the smaller format but it did highlight a sameness among lower-end suppliers and in some categories like candles and fashion jewellery. Do we really need more candle makers? No, we don’t.

We often complain about magazine promotions exclusive to supermarkets. Are Media is launching a promotion this week that is exclusive to Connections newsagents: