Australian Newsagency Blog

Saturdays used to be big in retail newsagencies. For many it was the busiest day of the week. Today, Saturdays are okay, but nowhere near what they used to be fort most.

If your Saturdays are not what they used to be you can wallow in that reality or try and change it. My advice is to try and change it. Here are some tips you could consider

1. New stock. Hold some new stock for unboxing on Saturdays. Let people know this plan.
2. Declutter / quit. Use Saturdays as the day of the week you quit lines. People who love deals will like your focus on this one day a week.
3. Teach. Invite people with with special interests to teach / share them in-store on Saturdays. This could include: knitters, those who crochet, scrapbooking, etching, hammering. The objective here is for the shop to be known as a place people can learn basic craft skills.
4. Host parties. Monthly. Based on brands you sell. A part for each fun related brand.
5. Play. Make it a day of fun in the shop sampling product and playing with things.
6. Free cake. Everyone loves cake. Maybe do a deal with a local cake shop to have a free cake to be sliced up at a set time every Saturday.
7. Draw prizes. If you do a lottery second change draw, draw it ion a Saturday with a bonus for the winner if they are in-store.
8. New displays. Make it a day of major change, noticeable change, in the shop.
9. Promote deals, maybe based on a Saturday Savers branding.

What ever you do it has to be about your business as it is the commercial outcomes you are looking for. I mention this so you can focus on what you need rather than what a local group may need / want ahead of you.

Of course, you could do nothing about Saturdays and your numbers in the future would continue the trend you are on today.

Our #NRL Season Preview special edition (March 2019 magazine) lands at newsagents this Thursday and is jam-packed with The Greatest Game Of All. #InsideSport pic.twitter.com/B89Qn0Y1yC

— Inside Sport (@InsideSportmag) February 11, 2019

We launched this new line of gifts in-store just on a week ago, through a display created using some principles from US retailers in a similar space. It is working a treat. Here is a video I shot, walking around the display.

Going through some old papers I found this at the office yesterday, a report about the Canberra Times going direct back in September 1993.

So much for politicians shutting this mob down:

Book exchanges are popular, again – in all sorts of retail situations including non-book retail. They take little space, require no work and they attract a following.

This photo shows one in the window of a cafe on Swan Street, Richmond. It shows how small a book exchange can be, how it can use space that otherwise may have little value.

Even if you don’t sell books a book exchange can work as it attracts people who like to read and these people could be magazine customers. I suspect they are more likely to be card customers, as opposed to people who do not read or write that much.

My suggestion is to try it, out the front of your store ideally and if permitted. See how it goes.

Sometimes, the best road to a goal is not a straight line. This is how the book exchanges work for retailers I have spoken with. Offering the service pitches their businesses in a different light, it has people noticing them who in the past had not. One retailer told me the exchange attracted an avid letter writer, who had not thought of visiting their shop for stationery previously.

In retail today we need to leverage many ways of attracting shoppers to our businesses. The idea of a book exchange is one. I especially like it for rural, regional and high street newsagencies.

How all their efforts and desires to own the customer relationship, newspaper publishers leave it to local newsagents to communicate on late delivery of papers.

The most recent experience of this was a few days ago in Brisbane when the Courier Mail was four and more hours late to some newsagents, meaning that safe delivery during the morning rush was not possible.

In an ideal world, News Corp would be public about the situation online, by text message and elsewhere so that customers know. Instead, I’m told that the only comms to home delivery customers was that from newsagents.

I am placing this post here as the request of one of then impacted newsagents, inviting feedback from others.

It feels like social media Marketing by Tatts has increased. I am seeing it regularly, through browsers and apps on devices that are scrubbed of cache history. Each ad pitches in-store. However, that is where it ends. While through each ad you can go to their online store, there is no easy link to local retailers, retailers near my then location.

I clicked buy now on the ad in the image above. Here is where it took me:

If I was a Tatts retailer, I’d want it to also pitch the closest shops open now where I can buy in-store now or soon, based on location and opening hours. It would be easy for Tatts to do.

What Tatts is doing now, by showing in-store as a purchase option on their marketing is ticking a box, paying lip service to their commitment to promote in-store purchase.

A company that genuinely supports its retail network would make finding nearby retailers easier. It would also be clever at using tech to enable the sale of lottery products to local shoppers through websites and Facebook pages run by local retailers. Thereby leveraging local retailers for online purchases, supporting local communities, appreciating the extraordinary investment by local retailers in promoting tatts brands consistently and nationally, often in places the Tatts outdoors marketing could not otherwise reach.

The current in-store text on Tatts marketing is of no commercial benefit whatsoever to Tatts product retailers in my view.

I recently created a new private Facebook group for engaged small business retailers. There, I will post images from stores across various retail channels and types I visit that I find interesting and / or inspiring. Anyone who joins the group can post. Here is the description of the group:

This is a private group where engaged small business owners can gain inspiration and motivation for evolving their businesses. Our goal is to share retail inspiration we see and to provide context for small business retailers. Any member of the group can post. In doing so, please always provide context. Ideally, posts are not promoting your business but, rather, of awesome businesses you have seen.

Anyone in the group is welcome to post their own content.

This report, from CNN a day ago, is interesting in terms of getting behind the hype of vaping and into health matters. Vaping has been on my mind recently because of a couple of supplier pitches I have heard about how to tap into this market in Australia. For the record, I have no interest in doing that.

Stanford Professor Dr. Robert Jackler tells @drsanjaygupta that the rising popularity in the Juul e-cigarette created an “arms race” in the nicotine market.

“There’s no regulation in the amount of nicotine in electronic cigarettes.” https://t.co/FiVs35ZyND pic.twitter.com/dgHOmTXPFi

— New Day (@NewDay) February 7, 2019

The front page pitch on the Herald Sun is compelling. $1 for 28 days of weekend delivery and digital access. It is a price that indicates how the publisher views the future of their product. One of my stores serves retirement village customers who like deals like this.

It is interesting seeing this front page pitch in the same week we are asked by a newspaper rep to provide a better location in-store for promoting their product. With their now constant promotion to our customers to ditch retail for home delivery, the requested move will not happen.

In my work with newsxpress I prepared and shared this cashflow management advice. I share it here to offer an example one type of business advice (of many) provided by newsXpress and for the advice itself.

CASHFLOW ADVICE FOR YOUR CONSIDERATION. 

In it’s simplest form, cashflow management is about ensuring a business has the cash necessary to meet its obligations and, hopefully, build reserves for the owners.

Good cashflow management starts with the understanding that this is your business. You sign the lease. You sign up for any loans. You hire, train, motivate, manage and, maybe, fire the staff. You choose what you sell. You set your prices for most of what you sell. You control how the shop looks. You manage the promotion of the business outside the business. Yes, this is your business.

The cashflow of the business is a product of your choices.

It is critical for every business owner to own their business cashflow performance. Blaming others or external factors is a cop out. harsh as it is, that’s the truth.

MANAGING CASHFLOW.

This list is ordered by priority.

1. Budget. Have one. Until you do, do nothing. This is priority #1. The budget should include an inventory spend allowance, so you know what you can spend. Plan the budget for the business to be profitable / viable without the need for agency to support it. Business budgeting should involve provision to grow savings / emergency funds without having to borrow / lifestyle choices / exit strategy if you cannot sell the business.
2. Funding. Before you borrow from any source, get advice as to the appropriateness of this funding. Too often we see expensive, unsecured, loans taken out at ridiculous interest, to the significant cost and harm to the business.
3. Shop lease. Only sign a lease you are happy with. Be prepared to walk away at the end of the current lease if the new one offered is not good. Run your business through the life of the lease as if you will not take up a new lease in the same location.
4. Labour costs. Run a lean roster. $25.00 a day saved in labour costs is like $50 to $75 in retail sales. That is, $15,600 to $23,400 in revenue for a six day week over a year.
   1. Ensure every team member has a role description.
   2. Set business performance targets:daily revenue / revenue per labour hour or similar. It is critical everyone working in the business understands the goals and that they support them.
5. Price for margin. Understand retail price psychology. For example, $13.50 is seen to be the same as $14.99. So, price at $14.99. By pricing to a higher price point you can discount back or fund a loyalty program that discounts for loyalty. Also, choose .99 over .90 or .95.
6. Loyalty. Run a loyalty program that focusses on people shopping more often with you. Be consistent in your pitch. Do not waver over the offer. It rewards loyalty, not laziness. The focus on loyalty needs to be whole of business, whole of team in pitch and management.
7. LayBy. Stop it. Instead, offer Oxipay, ZipPay or AfterPay.
8. Basket depth. Maximise every touchpoint.
   1. Counter. Always have multiple offers at your counter, offers that are easily purchased on impulse, offers that deepen the basket and make a shopper visit more efficient for you.
   2. Top selling items. Look at what is on either side. Make sure the products are relevant and easily purchased with the popular item.
   3. Exit pitch. Make sure you have a compelling and regularly changed pitch to shoppers as they leave the business.
9. Inventory.
   1. You control your buying. Not a rep of a supplier ordering on your behalf.
   2. A full shop is not necessarily a good shop. A smart shop is better. This is, one that people love to browse, love to shop. Often in retail less is more.
   3. Consider establishing a buying approval process where more than one person participates in buying decision. The goal is to slow impulse purchases. This could be someone outside the business.
   4. If you doubt your ability ton pay, don’t buy.
   5. Move, move and move. Every day there should be movement of products in the sore to keep it feeling fresh.
   6. If products don’t work, quit them as they are worthless if you put them in storage for later.
   7. Work with suppliers, exploring delayed terms or consignment opportunities.

DEALING WITH A CASHFLOW CRISIS.

A cashflow crisis is when you can’t pay your bills on time or a sustained period of dissatisfaction with the cash reserves in the business.Too often, small business retailers ignore a cashflow crisis, leaving action until it is too late.

Here is our advice on how to deal with a cashflow crisis.

1. Own the problem. Fixing this is on you.
2. Bring in outside help. This could be a friend, a financial counsellor. The best person will be someone who understands your type of business who can help you see what you don’t see and support you in tough decisions to be made.
3. Understand the problem. Know if it is short term or long term. Be certain about the role you have played.
4. If you run customer accounts, collect with urgency.
5. Ask the landlord for immediate rent relief. The more transparent you are with them the better. Document your case. Be prepared to show your P&L in support of your request.
6. Cut your roster to bare bones.
7. If you have stock on sale or return and it is not selling, return for credit.
8. Immediately start a sale.
   1. Give it a cool, non scary, name.
   2. Price items to sell, especially items for which you have already paid. Even selling below cost frees cash to the business.
   3. Get everything on the shop floor.
   4. Display to clear. i.e. not pretty displays for sale items.
9. For inventory that you cannot sell, consider eBay.
10. Consider selling assets. If you have equipment in the business that you no longer use, sell it.
11. Talk to all your creditors, apologise, outline your plan, ask for help.
12. When making progress payments on creditors, respect all with payments. NOTE: small regular payments could be key to you not facing debt collection action.
13. Act.Every decision, every action you take must work to addressing the cashflow challenge. If you have created a plan act on it immediately. This is not a time to overthink things.
14. Invest.If your cashflow challenge is because of a decline in traffic, not spending money chasing traffic will only make the problem worse. Spend carefully.
15. Plan for the end point. This will be either coming out on top or closing the business.

The cashflow achieved by a business is a product of your decisions. Be thoughtful in each decision and single-minded in your focus on a better cashflow outcome.

Thanks for reading. We hope 2019 is awesome for you.

Mark Fletcher
Managing Director
Tower Systems International (Aust.) Pty Ltd
E | mark@newsxpress.com.au.

It’s the 10th anniversary of awful bushfires in Victoria. Tasmanian communities have been battling challenging bushfires and Townsville communities are dealing with awful floods.

It is in times like these that we see local Aussie communities pull together to support each other and people connected to communities through a shingle, suppliers and more also chip in to help.

We are seeing it this week in the newsagency channel just as we saw it ten years ago in Victoria.

Local matters in good and bad times.

My thoughts are with those challenged in recent days by flooding and bushfires as well as with those confronting awful memories from ten years ago.

If a newspaper publisher asks you for a digital copy of all home delivery customers receiving their titles, so they can promote subscriptions to them, do you provide it?

Happy New Year especially to the piggies out there.

While interest in Chinese New Year has grown, opportunities for engagement by retailers have not changed. It is a struggle to find good-fit products. I though this year, the Year of the Pig, might be different. Suppliers with good pig products did not engage.

I like the season because of the community engagement, the optimism and the family celebration aspects. I think these are where we as small business retailers can shine.

Our engagement could start with in-store celebration, to connect the business with the occasion, and it could build from there. In some parts of Australia I suspect you could see more engagement for this than Valentine’s Day.

Here is an ad from The Washington Post, which ran during the Super Bowl. It is an excellent pitch for journalism and trusted news outlets. Democracy dies in darkness.

I note the ABC is the most trusted news outlet in Australia. It is unfortunate its budget has been cut so much in recent years. This matters because of the extraordinary concentration of media ownership in Australia.

Core newsagency categories continue to decline while most ‘new’ categories achieve growth. More new categories are emerging too, in more businesses. This is why I ask the question what is a newsagency?

In the data for the Oct-Dec 2018 quarter compared to the 2017 quarter for 149 newsagency businesses I can see more businesses with a sustained gift department than ever before. The same is true for toys. Books, coffee and services are emerging, too.

Whereas in the past I’d see evidence of small engagement in some of these, now I am more likely to see a separate strong department delivering between 5% and 10% of non-agency revenue to the business, seeing the percentage contribution from traditional fall further.

I don’t think it matters at this point that a business identifying as a newsagency strays far from what that type of business once was. More so than the shingle or the self-identified type is products sold. For example, a business with lotteries is, in my view, more identified for that than anything else they sell.

At some point, however, business owners willneed to make a decision about identity.
For the purposes of these studies, I’ll continue to look at this as a newsagency channel, even though there are fewer products unifying the businesses in the channel than ever before.

Here is what I see in the latest benchmark data. Note: Each data point is the average, mean, of all data for the data point.

OVERALL BUSINESS PERFORMANCE METRICS.

• Customer traffic. Down 1%.
• Overall sales. Down .5%.
• Basket depth.Flat.
• Basket dollar value.Flat.

CORE PRODUCTS.

• Newspapers. Unit sales. Down 9.5%.
• Magazines. Unit sales. Down 11%.
• Greeting cards. Revenue. Up 2%.
• Stationery. Revenue. Down 11%
• Lotteries. Revenue. Flat.
• Tobacco. Revenue. Down 14%.
• Agency. Parcels, gift cards, betting account top-up. Down 7%.

SPECIALTY PRODUCTS.

• Gifts. Revenue. Up 4%.
• Toys. Revenue. Up 3%.
• Plush. Revenue. Up 4%.
• Collectibles. Revenue. Up 3%.
• Craft. Revenue. Up 2%.
• Coffee. Revenue. Up 13%.
• Books. Revenue. Up 7%.
• Calendars. Revenue. Up 9%.

Magazines.
A big hit this quarter is in partworks results with revenue declines of 50% and more. That is to be expected given business problems with partworks in Australia. Weekly magazines lead the core category decline with many reporting 10% and more year on year decline in unit sales. This sits are the heart of magazine challenges in newsagencies.

Christmas.
The channel had a good Christmas overall. Christmas card unit sales were up 2% year on year on average while revenue was up 4% for the same period. Christmas boxed card sales were up 5%. Those who track seasonal gifts separately recorded 10% or more growth.
The results I have seen indicate a better Christmas than data published in news outlets a few weeks ago.

What does this mean?
It was a tough quarter for core categories but a good quarter for non-core.

There are businesses in the study that achieved double digit growth and others with double digit declines across the board.

The decline in traffic the core of papers, magazines, stationery and tobacco is not being replaced with sufficient new traffic. This matter needs urgent attention. Otherwise, we will see hundreds of more closures in 2019.

From what I can see, the newsagents doing best are those in control of their businesses. That is, those who do not rely on reps to order for them and those who do not rely on legacy newsagency channel suppliers.

The occupancy cost challenge continues.
Even in the best run newsagencies, the annual 5% increased in occupancy cost is not sustainable. In today’s market, I think 2% annual increases is fairer as that at least provides retailers an opportunity to keep up.

Landlords need to be aware of the changes in product mix, the challenges of low-margin core products and restrictions they place on what businesses can sell. They need to be flexible on rent so newsagency businesses can be sustained and thereby provide the service they want in their centre.

Looking at data for one store.
To address the point some make, usually people who have failed as newsagency business owners, here are some results for one business. Traffic: down 1%. Revenue: up 5%. Magazines: down 20%. Papers: down 19%. Cards: up 25% (33% of total revenue). Calendars: up 19%. Gifts: up 34% (11% of total revenue). Toys: up 61% (6% of revenue). Average sale value: $14.61, up 9%. Overall business GP 46%. This store is not alone with good numbers.

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

I love this new ad from Carling Brewery, pitching their local credentials and encouraging shop local. They show rather than tell.

Yes, this is a thing. It all started on the TV show Parks and Recreation. It’s a season within the season where gals appreciate their gal friends. Not overly commercial. More about fun and being social. newsXpress released to its members a pack of collateral and product opportunities. Here is one of the posters from the series.

This weekend is the start of the real Valentine’s Day season in many retail situations. I know in my case that weekends are critical to purchase volume for the season. We have cards on the lease line. The photo shows what we have at one entrance.

This entrance display is for convenience and pitching range – it’s more that the two supermarkets nearest to us have.

We have our main Val offer pitched elsewhere too, providing an immersive and unique gift experience.

We also have a considerable range of non traditional Val, expanding the scope of the season into more of a fun offering, helping those who would not usually purchase for the season to consider it.

Tatts appears to be demanding retailers adhere to employee terms that are not required by FairWork. I have seen them do this either not back down or take months to back down even after being shown that their demands on the retailer are considerably beyond the scope of the legal obligation of the newsagent employer.

The situation has come about because of the legislation the parliament passed following the 7-Eleven employee scandal. It was designed to protect employees in franchisees. As the Tatts / retailer falls under the definition of a franchise, Tatts has certain rights /. obligations under the legislation.

I would argue that Tatts has been overs jealous in actions of which I am aware and that they have issued formal breach like notices for matters that have no support in FairWork mandated obligations for employers.

The result is considerable stress for retailers, plus costs in dealing with what Tatts puts them through.

To avoid being caught in a Tatts created and managed stressful situation:

1. Ensure you pay everyone according to the award.
2. Provide a complete payslip for every pay period, preferably directly out of a reputable accounting program.
3. Pay on time.
4. Have written time sheets.
5. Do not pay employees in cash.
6. Have your processes and records checked by your accountant or some other appropriately skilled person at least once a year.
7. Treat family member employees as you would any employee.

A challenge with the Tatts approach is they will ask employees to complete a survey. One wrong answer to a misunderstood question could result in Tatts coming for you. This is why you need to be certain of your processes and be able to defend your position based on documentary evidence.

As I have written previously, the situation has come about because of the federal government passing vulnerable employee legislation following the 7-Eleven debacle. The Fair Work Ombudsman website sets the scene:

On 15 September 2017 the Fair Work Amendment (Protecting Vulnerable Workers) Act 2017 took effect. It makes the following changes to the Fair Work Act 2009 (the Fair Work Act):

• increase penalties for ‘serious contraventions’ of workplace laws

• make it clear that employers can’t ask for ‘cashback’ from employees or prospective employees

• increase penalties for breaches of record-keeping and pay slip obligations

• employers who don’t meet record-keeping or pay slip obligations and can’t give a reasonable excuse will need to disprove wage claims made in a court (this is also referred to as a reverse onus of proof)

• strengthen our powers to collect evidence in investigations

• introduce new penalties for giving us false or misleading information, or hindering or obstructing our investigations.

Read what the Fair Work Ombudsman website has to say about franchisors that have a significant amount of influence or control over the business affairs of the franchisee:

These changes apply from 27 October 2017.

Franchisors and holding companies (a company that has control over subsidiary companies) can be held responsible if their franchisee or subsidiary doesn’t follow workplace laws about minimum entitlements, the National Employment Standards, awards, sham contracting, record-keeping and pay slips.

This will apply to franchisors that have a significant amount of influence or control over the business affairs of the franchisee.

Franchisors or holding companies could be liable for breaches or underpayments if:

• they knew (or could have reasonably known) that a franchisee or subsidiary wasn’t following workplace laws
• they didn’t take reasonable steps to prevent it.

We are working with franchisors, their advocate and advisers and will have more information in our Help for franchises section when the changes take effect.

Tatts is acting because of an understanding of that term – significant amount of influence or control over the business affairs of the franchisee.

I think  that in terms of tatts, they do have significant amount of influence or control over the business affairs of the franchisee.

There is plenty of advice online outlining the obligations for franchisors and organisations like Tatts outlets.

Marie Kondo’s show on Netflix has spiked interest in decluttering. Applying her principles in business makes sense, especially in a visually and spatially busy business like a newsagency, even a former newsagency that identifies as something else today.

I especially like some of Marie’s mantras and their application to newsagencies such as Nostalgia is not your friend. I often see newsagents hang on to things because of nostalgia or do things because it what they have always done.

Part of decluttering in business is about doing what is right for the business, what moves the business forward, what makes the business more valuable the it comes time to sell.

Only you can work this out for your business. There are plenty who will try and tell you what to do and plenty of them are not newsagents. Listen to yourself.

Work out your own approach to decluttering the shop and the business. If you are not sure where to start, choose a category and focus on that. Or, choose a location, like the counter. Be single- minded in your focus on that. make a new experience, a new counter that focuses on the new view of the business: lean, efficient, happy, forward leaning.

A key rule Kondo applies is to keep things around you that spark joy. It would be interesting to contemplate what you keep in your business is that is your focus. Even considering this only from a product perspective. What products in your shop today spark joy? What would your business look like if you removed products that do not spark joy for you?

I am not writing this telling you what to do. Rather, I am posing questions so you can determine for yourself any changes you wish to make in your business. I have worked through this and found the results most interesting.

Decluttering is really about clearing a path forward, removing things, clutter, in the way of steps you can take. If you start with the counter and consider everything at and on the counter. If you apply Kondo’s principles you should end up with a very different counter for those who work in the business and those who shop with you.

We have taken a different (for a newsagency) approach to Merchandising some of the more premium pens in our range.

Nice adjacency at Coles Richmond:

The Prime Minister has announced plans today to seek parliamentary approval for an expansion of the instant asset write opportunity for small business – extending it to June 2020 and increasing the invoice cap from $20,000 to $25,000.

This is a good move for businesses engaged in capital investment in their businesses.