Australian Newsagency Blog

Small business retailers often express frustration at big business competitors: they have more money for marketing, get better supplier deals and often have lower overheads per dollar of revenue.

In my experience, there is little to be gained from worrying about these things, which we cannot change. There is more to gain from focussing on points of difference we can leverage.

For example, we can bundle items to make price comparison difficult or impossible, we can offer a loyalty pitch big businesses will not offer, we can be flexible in how and where we pitch producers while bug retail businesses are structured and, usually, inflexible.

Bundling is particularly useful as you can create a bundle unique to your business, which feels like it is a value proposition unlike anything they have seen to that point. While this is a product by product task, it is in these small steps that you can find success, by changing shopper perspective and winning business more direct competition may have denied.

Bundles can work in gift, stationery, cards, toys and more. It is easy to use tech to manage and track this.

I am yet to see a business that cannot more creatively compete with big business competitors in ways they have not leveraged up to that point. It is about being flexible, relative and locally engaged.

Big business competitors are not going away, they are not fading in size, they are not spending less. This means we have to be smart and engaged to compete.

Further to my recent post about cashless retail, I noticed Zumbo at QVB in Sydney is cashless.

While not without challenges, I expect more retail businesses will move to cashless as the benefits are considerable.

We started with a small selection of boxed Christmas cards near the entrance to the business, to introduce their availability.

Already, we are seeing hero designs emerge. As is often the case, the religious themed cards sell well early in the boxed card season.

The connection with Make A Wish is valuable as boxed card customers love the charity connection.

Our plan for boxed cards involved moving the offer every two weeks in-store and supporting this with social media promotion regularly to attract people to the shop.

While there have been some who said having Christmas cards out in August was too soon, others were relieved to find them early. Christmas cards are different to hot cross buns in that they take time to write and prepare – hence the people who appreciate accessing them early.

The newsXpress national conference on the Gold Coast this week opened with Pub Choir leading a 90 minute workshop that created a choir of newsagents and suppliers.

The 200 voices, who had never sung together before, singing Better Be Home Soon by Crowded House created a beautiful sound. The experience spoke to confronting challenges, breaking down barriers, working together and looking over the horizon at what could be.

The choir workshop was the surprise opening to the conference. newsXpress members had no idea ti was coming. The feedback since has been wonderful and inspiring for what it is leading to.

Over two days at the conference there was exploration of new traffic supplier opportunities, including suppliers who have not previously supplied newsagencies who spoke in depth about their traditional shoppers and how to find and serve them.

In one case, conference attendees learnt about a completely new product category that offers excellent margin and which has a strong following in Australia. Discovering how to engage with this with context of existing newsXpress product categories exposed another way to leverage opportunities for the business.

Everything presented and discussed at the conference was optional, as is the case with newsXpress.

On Tuesday, in a deliberately more intimate setting, seventy newsXpress members sat in an open circle and talked business in a personal way that was emotional and transformational. Many who participated have provided feedback about the profound impact of this three-hour session. Here is one message:

The introduction of #Pub Choir  set the scene for a conference that was going to be different…….and that it was.

Most enjoyable, entertaining and educational.

This morning’s round table discussion certainly was the most powerful and understanding I’ve been to. It was a ‘reality episode’ that really drove the point home that, as retailers, we cannot take our eye off ‘the ball’ for one second.

Here is a comment from another participant.

I have been a newsagent for close to thirty years and been to hundreds of meetings and sat on committees and been to many conferences. I have not in all that time experienced anything close to the inspiration, care, closeness and optimism as I have witnessed here. I mean this sincerely, the experience has changed my life.

I appreciate there are some here who will either through comments or privately mock this post or put it down. It’s okay. Think whatever you like. I have not written this to get your agreement. Those who were there know first-and what it was like and what it will mean for their businesses.

For me, it was a wonderful three days: inspiring, insightful and memorable. But overall, it was practical from a business next steps perspective.

In creating this newsXpress conference, I sought to put something together that was appropriate for our times, that focussed on next steps. I think too often planning conferences look too far ahead. In our channel today, the horizon is much closer.

On the choir experience, those who participated cheered loudly at the end of singing Better Be Home Soon as a performance. Then, at the end of the conference, we showed the video of the performance, and the cheered again. It’s a joyous memory.

While I’m not sure about the headline, it is terrific to see newsagents feature in the latest issue of Take 5 magazine. This is an issue to promote on social media as it humanises newsagents, makes us human and fun, if not wild! All good stuff!

In addition to my post on this topic earlier this year, here is a video I shot a last week where I talk more about the challenges I see in a convenience model for newsagents:

Talking with a newsagent recently about labour costs in their business and reviewing their data we could see that between 5am and 7am on the six days they were open they lost close to $200.00 a week.

They had two staff on for security reasons. The nature of the business, its location and management practices meant the early morning retail staff did not have much of value to do. This meant we could only judge the value of being open against revenue.

Digging deeper, we reached a first-step conclusion that the opening of the shop should be pushed back to 6am. This will more than  halve the loss given the revenue in that first hour.

What was interesting to me was the reason they continued to open early despite clear losses.

They were worried about upsetting the few customers who came in early. These were low margin value customers, customers buying products with low margin products and not shopping the rest of the shop then or at any other time.

They were worried about the negative comments in the community.

This had been the case for several years. Combined losses through the period of concern and inaction had mounted to in excess of $43,000 from these two hours of the day. My question to the owners was: has it been worth $43,000 to not act because of worry about what a few customers might say? Of course, the wander was no.

Only you can know if you opening and closing hours should be adjusted in your business. My advice is to first-up look at it as a purely commercial decision, so that you are sure of the numbers and what the financial decision should be.

The most common discovery in looking at businesses that are challenged is in labour management. Either the labour cost is too high for the business or wrong people are in some roles.

Data can be valuable in making changes. the key is to not over think the changes. Make a step, measure, assess and adjust if necessary. The alternative is you think, worry, think, worry and not do anything until you discover the inaction has cost you tens of thousands of dollars.

A competitor of one of my shops sells fake licence product for considerably less than the authentic licence products we sell. They have done it for some years.

While the landlord was unconcerned about fake products being sold in the centre, the licence holder was more engaged. However, they did not proceed with legal action because of the cost. The challenge was determining the source.

For licence holders it is a border force issue. Since the majority of containers coming into the country it is easy to get fake licence product into stores without the provenance being easily untangled.

At a recent gift trade show I saw the problem first-hand. There were a couple of suppliers with mid-tier licence products that were fake. By mid-tier, I mean not a popular licences as anything from Disney or similar. For sure the licences were strong and valuable, but not at a level or of a volume that the local licence representative would take action. and I think that is what they gamble on.

The challenge for retailers is being sure that what you stock is the real deal. Price is one way of checking. Branding and packaging are other ways. Another check you could do, if you have time, is at local indecent discount variety stores and independent tobacco shops. I have seen fake products in both types of stores.

in our marketing we pitch authenticity and we educate shoppers on how ton spot fakes in some product categories. In our experience, taking the high stand like this builds trust. This is important to return customers, those building collections within the licence.

Stocking licenced products can be a challenge because of unscrupulous retailers and importers. However, it can be worth it if you go in with your eyes open and have strong processes to counter fakes.

I have been interviewed by four uni students in this week for papers each is preparing for assessment. Two are writing papers for business studies, one for journalism and one for media studies.

In each case they were interested in where our channel sits in this period of disruption to print media. They came at the questions from the perspective of a print is dead world.

We talked about the habit based shopper for newspapers, their typical age and what else they buy. We also talked about regular magazine shoppers, =especially special interest title shoppers. They had not considered looking nat magazines beyond titled in the top ten.

Two students were shocked that some newsagents are growing their businesses outside of print media products, that some have been doing this for years.

The journalism student was really interesting to talk with because we discussed what constitutes journalism today and explored how local businesses, like newsagencies, might play a role in that evolving world.

One business student had not considered newsagency businesses trading outside their traditional shingle. The discussion led them to reconsider the position they were taking in their paper, that our channel would become extinct.

What I liked most about the discussions was the two-way discussion. They challenged me and I challenged them. I learnt plenty about a valuable demographic as these students will graduate, they will, hopefully, get jobs and they could become our customers.

I was surprised to learn that all four thought of our businesses as newsagencies =would have been in the 1990s. None could remember visiting a newsagency business that they would consider purchasing from beyond lottery, magazine, newspaper and some stationery products. None could name a newsagency they’d visit for gifts.

We newsagents have to change this. We have to preach loud and long about our relevance today, about our pitch away from what has been traditional for the channel. Those who are growing are growing in these new and fringe product category areas.

No one else will make this we are relevant today pitch for us. We have to do it relentlessly, entertainingly and with a voice that is relevant. Were need to do this so uni students don’t look at our channel only as one that is in a death roll.

I say this because each of the uni students I spoke with is open to a newsagency channel that is relevant to them, even if only a few times a year.

Here is a video newsXpress has just released to its members for use on social media, recognising the teachers in our community.

My POS software company produced this un-branded marketing video for its small business retail customers to use if they wish on social media and elsewhere.

Peppa Pig is one of the top licences in Australia with 200,000 searches a month. What’s terrific is that newsagents can access plenty of Peppa Pig products from greeting cards to stationery to toys to plush. The thing is, however, you need to display Peppa Pig products together to tell a strong and noticeable Peppa Pig story. Do that and you are more likely to more items in the basket and thereby maximise margin dollars from the purchase.

Check out this placement of a small format puzzle book and pens at a news outlet at Sydney airport. This is situated with fashion titles, close to the front. Where retail space is expensive, it pays to be smart and maximise every shopping visit opportunity.

Good news: Independent industry driven analysis of toy purchases at retail in Australia in the last financial year reveals significant growth in $10+ product purchase points.

All price point bands above $10 show growth in the research results. Even at the $50+ point, which accounts for 25% of revenue, we see 3% year on year growth.

Elsewhere in the report is evidence that the toys category is strong. I see this also in the benchmark data I access and from my own stores at a local business level.

What is most interesting is the insights as to licence and key brand opportunities. With toys being a fickle category and prone to quick growth and quick decline, having good data can be key to driving success.

I think any newsagency in any location could offer a consistent toy range and use this to attract new shoppers to the business.

While I am still working on a benchmark ratio, I am leaning toward to suggesting a reasonable goal could be toy revenue equal to at least 50% of card revenue While I know stores significantly above this, most the of the newsagency channel is below so I think a modest benchmark revenue goal is more useful at this time.  In considering this, toys means toys plus puzzles, plush and collectibles as that is how the analysts assess it.

And to be clear, the toys I am talking about here are those from major suppliers, not cheap generic brand toys you might put on a spinner on consignment.

I video I shot this morning.

Years ago, people purchasing a newsagency business could borrow against the value of the business without supporting brick and mortar property. It was considered a bankable asset.

That changes with deregulation in 1999. While people could still borrow against a newsagency business without other security, they could not borrow to the same level.

Today, the banks will not lend against a newsagency business. rather, they lend against property and permit those finds to be used to purchase and run a newsagency business.

The banks consider the business itself to not be an asset. The same is true for most independent retail businesses.

Talking to a banker last week at a business conference, they said their risk assessment people saw the increase in independent retail business collapses as a key reason. The situation of today is, in part, due to the collapse of others, their business failure has made it hard for those in business today.

There are lenders of last resort who will lend without the property asset. however, they do so at a cost and risk that is, in my opinion, not worth it. The banks have hurdles for good reason. I encourage anyone buying a retail business to be happy with them, to accept them and not seek to go around them.

The decision of the banks is not isolated to our channel. Further, it does not mean newsagency businesses are not a good investment. rather, the decision reflects on the nature of independent retail and the position of the banks towards risk assessment today. It reflects their natural conservatism and that money is their prime product.

Buying a business is like buying a house. You need the appropriate amount of capital before you can begin. The right amount of capital needs to also include funds for contingencies, costs you have not expected. Plus, it needs to reflect factors outside your control, which we see more in retail today.

Even with property backing a loan, banks will look automatically at a small retail business as an asset in itself. This is why the business needs to be prepared, to look like a good investment, to look like it will succeed. It supports the case to the bank.

I am disappointed News Corp. management permitted the publishing of the Mark Knight cartoon of Serena Williams in the Herald Sun today. What I see is a racist cartoon that panders to a racist agenda News Corp tabloids favour.

The cartoon is not funny.

Knight has been out in the media today defending the cartoon. If the cartoon was abut a hissy fit then he could have made it about that. Instead, he made this race-hate piece.

While we newsagents are not censors, I am not happy selling a newspaper with this in to. However, I take comfort that I am not in Sydney and having to sell the Daily Telegraph, which is more trashy more often.

Did we take the Herald Sun off the shelves? No. As I noted, we are not censors. Knight has a right to create a racist cartoon and News Corp. has a right to publish these. The best thing we can do is not buy the product.

The executive chairman of News Corp. has entered the discussion:

Criticism of Mark Knight’s Serena Williams cartoon shows the world has gone too PC & misunderstands the role of news media cartoons and satire. Poor behaviour in any sport needs to be called out. #media #cartoons #markknight @Knightcartoons @theheraldsun https://t.co/KQFuvIJp0Q pic.twitter.com/sRo3AQ1cJW

— Michael Miller (@mm_newscorpaus) September 10, 2018

Ebony magazine makes a good contribution:

Australian cartoonist Mark Knight also drew Naomi Osaka in his racist and sexist caricature of the #USOpen Champion who is of Haitian and Japanese descent, as a blond White woman. https://t.co/85JVaRfygX pic.twitter.com/HOcFKYV7pE

— EBONY MAGAZINE (@EBONYMag) September 10, 2018

Seventeen years ago, Ansett Airlines was grounded, never to fly again.

I miss Ansett, it was an terrific airline. I also miss it it because it was the underdog, the I think I can commercial competitor to the government owned airline. It fit well with me in a small business sense.

What I really miss abut Ansett when I travel is the service. There was something about it that was unique, something one does not see today from airlines. I got the impression they knew that service was a key differentiator for them.

While businesses often say that their service is a differentiator, the customer experience does not so often reflect this. For me, the Ansett experience was actions speaking louder than words.

I am in a couple of frequent flyer forums where Ansett comes up from time to time. People often speak in glowing terms of the company and their experiences with it.

That Ansett is talked of in such glowing terms today, seventeen years on, demonstrates that their service pitch was on-point, that they got it right. Many of us in business would wish the same good memories for our own businesses.

Getting customer service right is hard, especially today in the era of instant outrage, which is aided and abetted by the megaphone of social media. Because of this world, the bar is higher than ever and accountability more public than ever before.

While it is nice to look back nostalgically at Ansett, and years for those times, today is today and we in business must run our businesses for today’s situation. We have to operate knowing that even the smallest mistake can blow up and reach thousands in seconds. We have to focus delivering honest, engaged and valuable customer service We have to do this in a way that differentiate titans us from competitors on our street, in malls and online.

I get some motivation from Ansett stories in forums today when I read them because they remind me of a customer service experience I truly appreciated, an experience that differentiated the Ansett product from its competitor and, for me, that is at the heart of business competition.

We, like many longer-term newsagents I suspect, received a notice from Pricewaterhouse Coopers, the Liquidators for the failed Bill Express business, announcing an intention to declare a dividend on or around 21 September 2018.

Newsagents wishing to participate in the dividend will need to complete a proof of debt claim and provide documentation by September 19, 2018. This requirement is regardless of p-reviously provided claims as I understand it.

If you are not aware of the Bill Express saga and the cost it imposed on our channel, read the 200+ posts here about it.

We are loving squishy sales. We have now re-stocked five times and there is no slowing up. Being in a high-traffic shopping centre helps as does having the colourful range on the lease line as well as the certificates showing the health and safety checks undertaken by the factory supplying the product.

Attracting new traffic is a challenge for any shop. Squishies is a category that is working for us. The shopper often shops beyond this category.

A newsagent last week said to me people in my area don’t like Harry Potter. They said this when I asked why they had no Harry Potter product in their store. I tried it once and it failed, they said.

By trying it, they put in a small display of five different products in what I’d say is a less than ideal location in-store. They managed their own failure, I suspect to serve their opinion that Harry Potter products would not work.

The facts are that there are more than 350,000 separate Google searches in Australia each month for Harry Potter products, information, data. I have looked at he search data by location. The area where the newsagent to whom I refer is located is as interested in Harry Potter as the rest of the country. indeed, a major retailer nearby has a good Harry Potter offering in-store.

Too often I see independent retailers manage for failure by allowing personal preferences to dictate what can and can’t work for them.

The truth is, we never know for sure what will work in our shops and what will not work. The only way to find out is to have a crack, a big, bold, well-located, strongly supported crack and to promote this outside the shop as well as inside and to do all this as if we believe in the range 100%. In other words, we have to be all-in.

If we are not all-in, if we are half-assed, we manage to our expectation (hope?), we manage to failure and while this may suit our internal narrative, it fails our  business and those it feeds.

There is no point t in dabbling, trying small bets of this and that.l we are better off having less numbers of  ranges and going deeper into each range, committed and demonstrating the we serve those interested.

This is how it is with Harry Potter. Speaking from my own experience, a solid display with a broad rage of products in a good location achieves an average basket depth of four and a half items from the range. This is an excellent result. Four is above average basket depth for most gift shops, toy shops and newsagencies.

Once a Harry Potter fan or someone shopping for a Harry Potter fan sees the range and if the range is broader than they have seen elsewhere, they stock up and you benefit.

This post is NOT about Harry Potter. It is about…

• Being open to what can work commercially regardless of personal interest or taste.
• Wholeheartedly supporting product so they can find their success level.
• Understanding that less can be more.
• Data matters.
• Headline licences being key to new traffic.

For sure, there will be stores where Harry Potter does not work, for a variety of reasons. However, the licence will work in far more than currently think it will work.

This photo is of the second location for my first newsagency at Forest Hill in Victoria. I bought the business in February 1996. The landlord required us to move a few months later. This photo is of the new location. It reflects the focus back then on the newsagency shingle as well as on newspapers being used to attract shoppers.

The shop retail floorspace allocation was traditional for the time: a third for papers and magazines, a third for stationery and a third for cards.

We traded from this location for three years before being moved in 1999 up a level to a new locations where we added Tatts to the business. In 2006 we sold the home delivery run, for the price I paid for the original whole business, and six years later sold the whole business.

Even though it has only been twenty two years since I bought into a retail business in the channel, the extent of change has been dramatic. The speed of change is faster now than in the first fifteen or so years.

It’s good to look back and to reflect from a hindsight perspective.

It’s good to have a popular magazine issue to promote on social media. TV’s Greatest Reunions from Pacific Magazines is one such title.

From the Who stable, this one-shot is popular. People are tagging friends on social media and talking about the cover shots in a positive way. People who grew up in the 90’s are particularly engaged.

In my experience, placed at the counter TV’s Greatest Reunions is also being purchased on impulse, which is terrific for any magazine.

We have had people coming i and asking the title based on reading about it on social media. These are all wins in my view. We are maximising the opportunity.

Now, to get usual responses out of the way: 25% GP is awful; the magazine supply model is broken; counter space is better used for higher margin product etc. etc.

The thing is, this is a nice impulse purchase title that appeals to a demographic we connect with through a range of gifts as well as cards. It fits in a basked packed with value and good margin. This is where I see it working well, for us.

On TV the other night Lottoland claimed 700,000 Australian customers. Their pitches have not slowed since parliament set a date for their closure in Australia. Emails like this one in the image show clever campaigning on their part to get punters to part with their cash.

I wonder if the marketing is all part of a plan to remain connected with these shoppers long after the sunset of their traditional Australian offering becomes illegal. Nothing else makes sense.