Australian Newsagency Blog

It feels like there is more evidence of a growing anti-Murdoch sentiment in Victoria, especially on Twitter. Many tweets reference what happened in the UK when locals rose up against the reporting of a local matter by The Sun over there. Given the firm negative stance taken by The Australian and the Herald Sun on matters related to Victoria in recent months, I guess this type of social media commentary is not unexpected. Read the re reply from someone in a cafe.:

Here’s me. “When Murdoch’s tabloid failed Liverpool the people kicked it out of town for good. What’s stopping Melbourne?”https://t.co/tBrvT8dJd7

— David Milner (@DaveMilbo) October 28, 2020

Westfield has written to retailers outlining Christmas plans with a key investment appearing to  support the Klarna buy now pay later payment platform. The material talks about in-centre events and floor decals to drive shopper engagement with the Klarna app. The obsession with Klarna doesn’t feel supportive of retailers who have well-established buy now pay later arrangements.

While the Klarna rate to retailers is lower than the cost of Afterpay, it is higher than others.

As a Westfield tenant, I think they should promote shopping in their centre and not involve themselves in how people pay their retailers.

This is a serious question.

Do you really want business to get back to the way it was?

Business back the way it was represents no change, no learning from the last 8 months, no reflection on what Covid normal may look like, no consideration of societal change.

Whether we like it or not, things have changed.

• More businesses will allow more people to work from home, long after Covid, because of what they learned through Covid.
• More businesses will continue with less the in-person engagement with their customers learned through Covid long after Covid is dealt with.
• More businesses will sell to new people they discovered during Covid long after Covid.
• Plenty of businesses and individuals who cut costs during Covid will continue with a tighter focus on cash.
• Plenty of people who have worked from home will want to keep working from home.

Businesses that have benefited from these and similar Covid related changes will want that experience to continue rather than getting back to the way business was.

To me, the calls for business to get back to how it was are regressive. The future is always in front of us, never behind.

This is why I think that the businesses that have a good Covid are the ones best positioned for a brighter 2021 and beyond. They are most likely the businesses run by people who have not complained and moaned their way through Covid.

I get the calls to open up, get the economy moving and the like. However, for plenty, their economy has been moving. This is especially true in regional and rural Australia as well as in the high street.

It’s critical that all retailers are focussed on the (cliché alert) new normal of more people working from home, less CBD / business centre foot traffic, more online sales and the associated changes in what sells and when. That is where good business will be found, in those areas of change, not back the way things were.

The year presents us excellent opportunities for embracing change, leveraging what we have learnt since March this year and rapidly leaning into what we see emerge as I expect the pace of change to increase. This will be a consequence of Covid, what people have themselves learned through Covid and also a consequence of the Covid recession.

No, I am not looking for business to go back the way it was, I’m too busy looking to the future, which does look exciting.

On November 2, 2020, Are Media (formerly Bauer)  commences a trial placing 10 of their top magazine titles with 28 Australia Post retail outlets. Woman’s Day, New Idea, Take 5, That’s Life, Better Homes and Gardens, Australian Women’s Weekly, Home Beautiful, AWW lifestyle title, Puzzler – Woman’s Day, Puzzler – AWW are the titles in the trial from Are Media along with a Bluey title.

The only need for this trial is to test whether Australia Post retail outlets offer a viable alternative to the newsagency channel.

Here is a short video from me this morning with some of my views on the trial.

My POS software business earlier today released to customers a free contact tracing initiative through its website that enables them to easily collect the details of people entering their business in a format useful to health authorities should that be necessary.

Here’s part of what I announced to Tower customers early this morning:

We have done this because state and territory governments have not agreed on a consistent approach and because we think manual record keeping is not ideal in times when health authorities will want a fast response.

Using our approach, we collect and securely store customer details and allow our retailers, and only our retailers, to download these based on selection criteria you enter.

We generate a QR code unique to each business. Customers scan this and are taken to a page we create for each business where they enter their name and mobile number. They can optionally enter their email address. We tag this data with the date and time. That’s it. Their visit is tracked. If asked, retailers can show authorities that they have a process in place for collecting this data. For those without a phone, collect the data manually, on a clip-board.

As we gain use experience with this facility we expect to enhance it further.

We have also shared a template document to use at the front of a store, with the sample QR code replaced with the store’s QR code:

We have developed this free QR code based contract tracing tool to help our small business retailer community to be well equipped for helping health authorities should there be a Covid diagnosis that connects with the retail business in some way.

This is another way we can give something back to the small business retail community, a community that is so important to our business.

We have seen with Covid that the ability to quickly track those who may have had contact with someone who tests positive it critical to the public health response.

This contact tracing initiative from our POS software company could be a useful tool. From the outset, we knew we have to deliver this without cost to small business retailers.

We are grateful to those on our team who have brought this to life and our own retail stores where we tested this to ensure its practical usefulness.

With Covid here for a while longer, having tools like this for rapid response is critical for the economy, critical for our small business retail community.

Based on comprehensive sales data for July through September 2020 with data from 2019 from 128 newsagency businesses across Australia in city and country locations, high street and mall, the latest newsagency sales benchmark study is revealing as to the impact of Covid on our channel and the value of location.

• Covid restrictions have benefited many newsagency businesses.
• High street locations have fared better than shopping mall locations.
• Regional Australia has performed better that capital city Australia.
• Diversification of product mix is key to traffic generation.
• Magazines are back on their pre-Covid trajectory.
• There are winners and losers.

I have data from a mix of branded and un-branded newsagencies as well as a mix of states and territories in the data set.

Given the extraordinary gap in performance, I share the results for different cohorts, because reporting them as one dataset does not make sense this quarter.

Victorian newsagencies.

Victorian newsagencies have had a good second Covid lockdown. Their newspaper, magazine and lottery products performance is better than other states, because of the lockdown I think.

All but one Victorian high street business I have data for is up on on 2019. The biggest increase relates to average sale value, this has spiked considerably, as you may expect. The categories that have performed best in Victoria this quarter in terms of year on year growth are: cards, gifts, plush, jigsaws, home decor and games.

Even though the data is up to September 30, 2020, it is interesting to see Christmas doing so well in Victorian businesses that had it out. This augurs well for the season.

All Victorian shopping centre businesses are down. Shopping centres are in for a rough few years I think.

Now, outside of Victoria…

Regional high street businesses.

• Transaction count change: up 3%.
• Revenue change: up 7%.
• Basket size change: up 13%.
• Newspaper unit sales: down 11%.
• Magazine unit sales: down 9%.
• Card revenue: up 7%.
• Stationery revenue:  down 8%.
• Gift revenue: up 19%. 80% of businesses report selling gifts.
• Toy revenue: up 11%. 10% of businesses report selling toys.
• Puzzle revenue: up 43%. 25% of businesses report selling puzzles.
• Instant lottery revenue: up 26%.
• Lottery revenue:  up 7%.

City high street newsagencies.

• Transaction count change: up 1%.
• Revenue change: up 5%.
• Basket size change: up 9%.
• Newspaper unit sales: down 8%.
• Magazine unit sales: down 9%.
• Card revenue: up 6%.
• Stationery revenue:  down 8%.
• Gift revenue: up 9%.
• Toy revenue: up 11%.
• Puzzle revenue: up 60%.
• Instant lottery revenue: up 28%.
• Lottery revenue:  up 4%.

Regional shopping centre businesses.

I do not have enough businesses in this group to safely report.

City shopping centre based newsagencies.

• Transaction count change: down 22%.
• Revenue change: down 31%.
• Basket size change: up 2%.
• Newspaper unit sales: down 13%.
• Magazine unit sales: down 11%.
• Card revenue: up 4%.
• Stationery revenue:  down 17%.
• Gift revenue: up 11%.
• Toy revenue: up 9%.
• Puzzle revenue: up 22%.
• Instant lottery revenue: up 28%.
• Lottery revenue:  up 5%.

Note. 

These are averages. The gap between those doing well and those not doing well is considerable. It is important that newsagents look at their own data as the most important competitor they have is themselves. The trading period from the past against which you compare results is your competitor. Look at those numbers more carefully than you look at these benchmark results.

What have we learned from the last 8 months?

• High street retail fares better than mall based retail.
• Diversification in newsagency product offering drives better shopper visit efficiency.
• Having an online presence is vital.
• People want to connect – this is one reason cards are doing so well.
• Postable gifts are selling well.
• Safe buying is key.

I am grateful to all newsagents who shared their data for inclusion in this study.

Mark Fletcher.
Email: mark@towersystems.com.au  Website: www.towersystems.com.au  Blog: www.newsagencyblog.com.au
M | 0418 321 338

Small business retailers are quick to complain about a lack of visits by a sales rep from a supplier, often citing this as a reason to not order.

The only reason to not order products is if it is not working. Blaming a method of ordering is nuts in my opinion. It’s petty and ignorant of facts.

But back to sales reps. They are expensive and that expense is covered by product prices.

Considering reasonable wages, possible commission and operating costs, a sales rep costs a supplier at least $110,o00 a year – rarely less and often considerably more, especially in harder to get to locations.

A rep costing $110,000 a year would need to make the supplier at least $1 million in revenue, depending on the product category as margins vary.

Given that in an average year a rep can be on the road visiting stores for 200 days a year and often only around 175 allowing for in-office meetings, training, trade shows and more, the rep will need to write at least $5,000 a day in business.

Allowing for the geography of Australia, in regional Australia a sales rep might see 2, maybe 3, retailers a day. Often, though, it would be 1. In the city, the number could be 4 or 5.

Talking with some suppliers and allowing for data they shared, the $5,000 number for an average calculation like I am presenting here needs to be closer to $7,000 as that allows for closer to the 175 days a year in-store.

Covid has change all of this from a supplier perspective. Many have realised that they can maintain sales revenue without the pre-Covid in-store visits. They have looked at this as a bottom line benefit if they reduce their rep investment and replace it with a back office investment, but not to the sale value as the reps.

Many small business retailers love reps because they do work for them, by doing the orders. This is false economy. As I noted above, order what’s selling and do this yourself – be in control. Letting someone else spend your money may not be ideal.

Smart suppliers that reduce their investment in sales reps will pass on some of the savings to retailers. That’s what I am looking for. I don’t expect all the benefit as they do need to invest in back office people as well as appropriate IT infrastructure to make doing business with them easier.

I think the rep model as it relates to small business retailers is up for grabs, that significant change can be brought and that small business retailers and their customers can benefit significantly from this.

We are having terrific success with videos of artists behind products we sell. Whether shot on a phone or put through a production process like the video I share in this post, this content is referred to by marketers as shareable content. This is ideal for social media as it is a glimpse beyond the product.

Engaged suppliers are good about providing this content to retailers, to help them reach new shoppers.

This video below is for a high-end $80 metal ornament of Ariel and Flounder, from The Little Mermaid. We have this in-store and online.

I’d love to see more suppliers provide shareable content like this or in an ever more raw form that retailers can brand with their store brand.

I ask because someone shared a photo of social media of it on sale in a newsagency in the ACT.

For the record, I would not sell this book in my newsagency.

Further to my post yesterday about Christmas in the newsagency yesterday, here is one of the social media posts that I have created for one of the shops I wrote about. This is for my Southland business.

For those who think this is an expensive production, here is what I did. I shot the video at my Southland store a week ago on my iPhone. I loaded that to iMovie on my Mac and stripped out the background sound. I added a filter to soften the image. I then loaded that video into a platform called Promo where I added the text and music and, voilà, you have this video ready for the socials…

In case people are wondering – I have posted this to show what can be done for no cost and a small time investment, to pitch the business differently to what peso,e expect from a newsagency.

Yes, I am aware it’s been going around social media from other outlets. Quirkes is where I noticed it first.

Here are the Christmas cards that have been in place now for a couple of weeks in one of my newsagencies.

And here is part of the range in another of my stores, where space is quite limited:

I am showing them to speak to range, front of store placement and being out early.

We started with boxed cards over a month ago and comparing year on year we are more than 50% ahead. Singles have been out less time but they, too, are well ahead. It’s clear from early sales that caption 4range will be more important this year than in the past.

Covid is demonstrating that high street newsagencies have significant benefits over shopping centre newsagencies in a pandemic. It is also helping high street newsagents be flexible in their approach to business, something that is more channeling in a shopping centre setting.

I suspect there are newsagents in shopping centres today looking for nearby high street location opportunities.

I suspect, too, there will be some who were considering a shopping centre tenancy who now consider it unlikely.

With shopping centre occupancy costs yet to reflect new market conditions, they are not appealing, especially when you consider the restrictions coded in leases as to floorspace allocation for categories outside what a landlord considers to be cor newsagency categories.

If shopping centre landlords do reset occupancy cost to reflect the new conditions, which would mean an occupancy cost decline of at least 33%, their space could be appealing for a newsagency or a newsagency related business.

It would be a bold landlord who makes that move. They are not known for wanting to be first for such changes.

The thing is, a newsagency is good for a centre, especially an evolved newsagency that is focussed on the future with a nod to the past. Such a business can be fresh, enticing and net traffic generating, not relying o=n the traffic a centre itself has.

With fashion retail looking at a tough year ahead and some other niches also challenged. the mix in shopping centres will change. That could be an ideal time for landlords to better support a traffic anchor like a newsagency. It will be interesting to see if they have what it takes to make their space commercially interesting to newsagents … because right now it is not commercially interesting.

One thing Covid has provided newsagents is options, meaning we are not as reliant on shopping centres as we used to be.

Looking at magazine sales in areas not in lockdown in Australia I am seeing sales volumes on track with the pre-Covid trajectory.

While there are some differences between product categories, the majority are on track for decline. Weeklies are especially vulnerable. I expect that now they are all under the one roof, there will soon be significant shake-up as the trajectory from newsagency sales, if reflected across all retail, would be unhealthy for ad prospects.

As has been the case for years, crosswords are strong as are special interest titles. Both of these categories are differentiators for the newsagents who actively engage with them.

While I hope to have the benchmark analysis completed early next week, the magazine situation is interesting because of the planned expansion into Australia Post and the ownership change of Pacific and then of Bauer.

A Reject Shop in a major shopping centre has tons of empty card pockets. It seems an apparent greeting card supply chain challenge for the Reject Shop is unresolved. This would usually be good news for the newsagency nearby but they, too, face supply challenges.

On the one hand, empty pockets show which cards are popular while on the other hand, retailers can’t bank anything from an empty pocket.

Here is their consumer price, for a 4-pack.

Here is the Spotlight price for the same product.

I could not find any newsagency online with a 4-pack and only a couple with singles, prices at double the Amazon per stick price.

Online is where people price compare. Take UHU, in Australia yesterday, there were 7,600 UHU and UHU related searches online. Our channel is nowhere to be seen in the top 100 results.

For my POS software co. I’m hosting another workshop for retailers considering selling online. It’s today @ 12 noon Melbourne time.

This will be a free-flowing workshop, looking at what gets people to websites, what is good design, how to handle freight and the common challenges small business retailers  confront. Here are the connection details:

https://zoom.us/j/99874661583?pwd=RW5NdU9yUlhzaWZSUTdENXBBclJhQT09
Meeting ID: 998 7466 1583 Passcode: 894702

I’ve done 30 or so of these this year. Each one is different because they are driven by questions from people. If you think having a website created fort your business is on the cards, come along.

The circumstances of 2020 offer an opportunity to embrace Halloween in a fresh and engaging way. I am seeing excellent early sales, good value sales for the season.

Now, before you say been there done that or it won’t work in my area, it is different this year and the best growth I am seeing is in areas where the season has not been strong in the past.

While you want to sell products, this is a season with which to have some fun. Here are some practical and low cost tips for leveraging this

1. Get people to dress in costume and offer them a discount for that on the day, October 31.
2. Wear make-up yourselves.
3. Run a scary sale and offload things you are struggling to sell. Create bright red bloody signs. Make it fun.
4. Run a midnight sale or at least a dark night sale – this is another way to get people seeing your shop differently.
5. Have free bite-size candy at the counter.
6. Select a spooky playlist on Spotify or your in-store music platform.
7. Run a colouring competition for kids with a prize for the best and a charity donation to encourage engagement.
8. Print a recipe sheet and give this away.

These ideas are to get you thinking. Go on, have fun. Boo!

FYI, here is a quick and dirty, unbranded, social media image I made to promote a Halloween sale. It’s designed to get attention and, like all good social media content, be disposable.

The front page of the Herald Sun today features 2 stories. One is the Brownlow win and the other is typical propaganda. Victorians have demonstrated extraordinary resilience over the last two and a half months of the second wave. We have crushed it and now we see restrictions eased. Rather than celebrate what Victorians have achieved and focus on that news, the News Corp take is negative, on brand for this paper these days. For a newspaper that claims We’re for you, the relentless campaign demonstrates they are not for us. It’s embarrassing to have this paper on the shelves.

I’ve taken a look at the posts on Twitter by the Lott (Tabcorp) this morning and it’s clear their focus is all about driving online sales. It starts with the banner for their Twitter space

While I get that as a business they need to promote their business, the pressure they put on small business retailers to promote the Tabcorp business, usually to the detriment of the retailer business, is considerable.

If I was a lottery retailer, I’d like to see Tabcorp more engaged with encouraging shopping in physical retail.

Plenty of local councils are offering Covid related small grants to help small businesses with a range of projects. from what I have seen they are easy to get and broad in their application.

• One newsagent applied for a $5,000 grant to replace the carpet in their shop. It was approved and the carpet goes in next week.
• Another newsagent applied for $10,000 to install air-conditioning. They were given $7,500 and it has been installed.
• Another newsagent applied for $5,000 to pay for the development of a website. The website goes live next week.
• Another newsagent applied for $10,000 for automatic doors. They were given $5,000.

Many councils around Australia are engaged with grants like these. My advice is to check with your council. If they have a Covid related grant, apply – the worst thing that can happen is that they say no.

The following notice was issued with this advice: We’ve again become aware of heightened fraudulent activity across our retailer base, where fraudsters are contacting sites pretending to be epay representatives (or sometimes a product vendor, the ATO or other Government Department) and requesting that they print vouchers for predominantly cash products such as VPAY, FlexePIN, Paysafe or Neosurf and to read the PIN code over the phone to them or suggesting they need to provide payment for upgrading their terminal or service with epay – other MO’s include advising retailers they’re paying more for the transactions than they should or that there had been ‘issues’ with some products and they need to print some out to verify if it have been fixed. We’ve also had instances where a retailer was convinced that epay and/or Neosurf was closing down, so they’d been tasked with retrieving all unused vouchers (by getting them to print and read the details overs the phone) so they could be deactivated – these scammers change their story often, so past scenarios are not necessarily a good indicator of future ones.

CATS FANS – cheer your team on to Grand Final glory. Get your free team poster with the Herald Sun at newsagents tomorrow. DETAILS > https://t.co/Vih9ARNb7G pic.twitter.com/svqaaDHgKE

— Herald Sun (@theheraldsun) October 15, 2020