A blog on issues affecting Australia's newsagents, media and small business generally. More ...

The history of the Australian newsagency part 3: early 2020 – 2023, the Covid years

Aussie newsagency businesses were designated essential early in the Covid pandemic lockdowns implemented in the states and territories of Australia. This meant newsagencies could open while many retailers around then had to remain closed. This reacquainted many Aussies with their local newsagency.

Plenty of newsagents leant into the lockdown opportunity, expanding what they sold beyond what until then had been traditional for newsagencies. While gifts and similar products were common among those who expanded the range of products in their newsagencies, other new categories appearing in some businesses own the channel included flowers, coffee, electrical goods, clothing and camping goods.

While retail had the physical challenges of social distancing in this time, there were also considerable supply chain challenges as well as new operational models to learn such as selling online, click and collect and making as much of the in -store experience as contactless as possible.

Plenty of suppliers who had previously not engaged with the newsagency channel as they did not consider it appropriate to them engaged during the lockdown years. The expanded the range of products forward-leaning newsagents could easily access for their businesses.

As a result of the lockdowns, newsagents and suppliers found other ways of connecting and doing business. Trade shows that had been a key part of the product sourcing cycle for newsagents proved to not be as important post-lockdown. Retailer attendance at trade shows did not bounce back to pre Covid numbers.

Another situation that emerged post-lockdown is that newsagents relied less on traditional product categories. The commercial interests of newsagents and expanded, there were more opportunities than traditional suppliers offered.

Many newsagency businesses experienced double-digit growth in calendar 2020 over 2019 and 2021 over 2020. While the growth slowed, it did continue in 2022 and into 2023. The newsagency businesses in which growth was not as strong tended to be those that did not embrace the opportunity of being designated essential during the Covid lockdowns.

The good Covid years made newsagency businesses more appealing than they had been. This resulted in more business sales post Covid lockdowns than we were seeing previously.

As 2023 developed even though Australia had fewer newsagency businesses, the businesses themselves were stronger and had better relevance. The Australian newsagency channel was refreshed, well, most of it at least.

There was a surge in newsagency business closures in late 2022 and into 2023. These businesses tended to be those that had not change, that had not embraced changed. With newspaper and magazine sales continuing to decline, foot traffic was lower, unless steps were taken with new product categories to make the business more appealing. While media outlets considered the closure of newsagency businesses newsworthy, newsagents did not as most of those remaining continued to trade well.

Covid change the local Aussie newsagency and local communities benefited.

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Newsagency management

The history of the Australian newsagency part 2: 2015 to early 2020

2015 to 2020, up to the start of the Covid pandemic, were tumultuous for Australian newsagents as suppliers newsagents had served for years in the agency side of the business looked elsewhere for revenue.

What we now know as The Lottery Corporation ramped up selling lottery products online and on mobile devices, achieving excellent growth, taking plenty of in0-store purchases from retailers who continued to invest, under duress, in shook-fit and other requirements.

Newspaper publishers withdrew from newspaper distribution arrangements with newsagents, often delivering a poor substitute and leaving customers of long standing receiving poor service, failing on their promise of a better service for their subscribers.

Newspaper publishers also reduced in real terms the margin retail newsagents make from selling newspapers. What newsagents made did not keep pace with price increases. Also in these years, plenty of local newspapers closed with local news apparently valued less by major publishers.

Plenty of magazines stumbled with Bauer Media doing a poor job running the ACP media business they had purchased in 2012 and with pacific magazines not receiving much love from its owners at Seven West.

Banks no longer valued a newsagency business as an asset against which a purchaser could borrow.

Also during this period of 2015 to early 2020 there was disruption from the migration of accessing news and other traditionally print content to online.

Newsagents themselves remained disorganised with four different associations claiming to represent them.

In the midst of the changes plenty of newsagents realised that they had to make their own success, that suppliers who had led the channel for decades had all but abandoned it.

There was no whole of channel move this way or that. Rather, some moved into book retail, others into outdoors, others into coffee with most significantly expanding their gift and homewares offering.

Initially, the evolution was through a range of everyday gift suppliers who saw the opportunities in the newsagency channel. The focus was on gifts priced at under one hundred dollars and that served the traditional seasons of Valentine’s Day, Easter, Mothers’s Day, Father’s Day and Christmas. Newsagents continued to dominate in card sales for these seasons so tapping into gift related opportunities seemed easy.

The extent and speed of change in newsagency businesses varied business to business. There were many who did not change in these years, and this was a key factor in business closures, which were tracked at around 10% of newsagency rooftops each year in this period.

These years of 2015 through to early 2020 we say the biggest move from the agency model on which the channel was built to pure retail. Success was dependent on newsagents becoming retailers.

By the time 2020 reached us, the Australian newsagency channel was a channel in name only. In reality it was just over 3,000 retail businesses all operating locally, independently, and differently – some thriving, some treading water and some slowly going under. While there were several marketing group trading banners in the marketplace, the consistency between the businesses in these groups was not evident.

If it were not for the arrival of the pandemic early in 2020, the next years for the newsagency channel would have been quite different.

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Newsagency management

The history of the Australian newsagency part 1: 1980 to 2014

 In 2014 I was asked to contribute a chapter for A Companion to the Australian Media, the first comprehensive, authoritative study of Australia’s press, broadcasting and new media sectors. Edited by Bridget Griffen-Foley, this book is loaded with terrific content on the history of the media in Australia.

My contribution was on the history of newsagents. I share it below as part 1 of what I plan to be three posts on The history of the Australian newsagency.

The first organised newsagency in Australia was created in the 1800s to distribute publications to the Victorian goldfields.

The delivery news agents soon found themselves delivering multiple publications along particular routes, creating the beginnings of the first newsagency businesses. Over time, delivery routes were organised, providing the newsagent covering a defined route with exclusivity by arrangement with publishers.

In the latter part of the 1800s, some newsagents opened retail shops from which to run their distribution businesses. In addition to selling newspapers and magazines, these early retail newsagency businesses also offered stationery.

A traditional newsagency business model evolved, consisting of a retail outlet, distribution of newspapers and magazines to homes and businesses in a defined territory, and the supply of newspapers and magazines on a wholesale basis to other retail outlets. This model was not national: in South Australia and to a certain extent in Western Australia, the distribution and retail businesses evolved separately, making it rare for one business to operate both a retail shop and a distribution business.

The supply of newspapers and magazines to other retailers, called sub-agents, on a wholesale basis was contentious almost from the outset. Early in the 20th century, newspaper publishers took the lead in controlling who could purchase a newsagency and where one could be opened, opening hours, service levels and even what products could be sold. The lever of control was the Newsagency Council, established in each state and made up of publisher representatives.

Central to the newsagency model was that newsagents were – and are today for some suppliers – agents. This meant that they could exert little control over key aspects of their businesses, such as products supplied, quantity of supply and selling price.

Newspaper publishers micro-managed all aspects of their products in a newsagency business, from the time by which they had to be delivered to homes to their placement in the shops. Newsagents accepted this as a cost of having a monopoly.

It was not uncommon, even as late as the 1980s and early 1990s, for publishers to restrict access to ownership of a newsagency based on race. Magazine distributors exerted similar control on the granting of a trading account.

Newsagents were selected as the preferred retail outlet for lottery products and held this position almost exclusively until the 1980s.

A typical newsagency shop for much of the 20th century would have around 30 per cent of floorspace given over to magazines, 30 per cent to greeting cards, 30 per cent to stationery and 10 per cent to newspapers.

As shopping centres evolved in Australia, more newsagents opened retail newsagency businesses inside them. In 1999, through a process overseen by the Australian Competition and Consumer Commission, newsagents lost their monopoly over the distribution of newspapers and magazines. This resulted in other businesses being able to access direct supply of newspapers and magazines. While some publishers maintained newsagents as the last-mile distributor of products, they no longer controlled the relationship. No compensation was offered or paid to newsagents for the loss of the monopoly.

While the distribution of newspapers and magazines was deregulated, pre-deregulation rules and processes have remained for newsagents in relation to the supply of magazines. This has disadvantaged newsagents. In the years since deregulation, the relationship between newsagents and magazine distributors has prevented newsagents from breaking free of the monopoly-protected business model.

Since 1999, distribution and retail newsagency businesses have evolved. The number of newsagencies with a combined retail, home delivery and sub-agent business has significantly fallen as a result. Whereas up to 1990 newsagencies carried a reasonably consistent range of products across a limited number of core categories, in the 1990s some newsagents branched into new areas.

The pace of change in the newsagency channel increased in the mid-2000s, with many newsagents either selling or giving up their newspaper home delivery and sub-agent

distribution businesses. This came about because newspaper publishers refused to allow newsagents to charge a commercial rate for distribution services. Coupled with a static cover price for newspapers, from which newsagents made a margin, this meant the majority of newspaper distribution businesses were loss-making. A limited number of newsagents purchased these businesses, combining them into bigger specialist distribution businesses by leveraging leverage critical mass to make newspaper and magazine distribution profitable.

Since 2011, the pace of change in retail newsagency businesses has increased considerably, driven by declining sales of print media products, increased retail real estate and labour costs, a higher cost of capital and a greater penetration of franchise groups providing newsagents with management and marketing advice.

By 2012, there was a growing separation between distribution newsagencies and retail newsagencies, as well as a growing gulf among retail newsagencies. This was encouraged by News Limited with a trial project called T2020, intended to force newspaper distribution consolidation among newsagents. While T2020 failed to go beyond trial, newspaper publishers continued to encourage newsagents to consolidate to drive operational efficiency.

In 2013, around 7 per cent of retail newsagencies closed, due to a lack of newspaper home delivery revenue and falling newspaper and magazine retail income. Today, while a typical high street newsagency has a floor space similar to that of 30 years ago, the average shopping centre newsagency has a more diverse product offering.

Whereas in 1999 newsagents did not sell printer cartridges, by 2014 they accounted for around 40 per cent of stationery sales. Some product categories, such as toys, have come full circle. Decades ago, newsagents used to dominate in the toys category. This faded from the 1980s; however, since 2013, newsagents have clawed back toy sales and are now a sought-after channel among toy manufacturers.

Market forces are driving newsagents to pursue greater change and develop businesses that are more competitive and with a broader appeal to shoppers. While some suppliers continue to resist this, newsagents expect to finally unshackle their businesses from pre-deregulation anti-competitive practices.

Nowhere is the change confronted by newsagents more evident than in industry representation. In 2003, close to 3,000 newsagents were members of the national Australian Newsagents’ Federation industry association or one of its affiliated state associations. By 2014, that number was estimated to be under 2000, with newsagents relying less on national representation.

REFs: Australian Newsagents’ Federation, Newsagents Year Book (2014).

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Newsagency management

We installed a self checkout kiosk in our newsagency recently

We installed a self checkout kiosk from my POS software company in our newsagency on Glenferrie Road Malvern recently. My understanding this is a first in the local indie Aussie newsagency channel – while WH Smith have their self checkout terminals they are far removed here from a local Aussie newsagency. It’s going well. Customers are using it.

While we developed this POS software self checkout solution for other retail channels, I wanted us to test first in one of our shops, to allow us to see interaction first-hand and to tune the software and hardware as a result.

Here’s a short video about it:

Australia’s big two supermarkets have damaged the reputation of self-checkouts with cameras watching shoppers and less shop floor staff because of more self-checkout positions, they have given self-checkouts a bad name.

There are situations where self-checkouts can be useful for customers and for the business, and where then can be setup without the nasties the big two supermarket chains have used.

I know of retailers who like the idea of a self checkout located far from the counter, closer to where customers load their car or van. A small format self checkout kiosk can be the answer.

I also know of retailers who have shopper traffic peaks for brief periods and where a self checkout terminal could be a cost effective way of smoothing shopper flow.

Tower developed a self checkout solution for our POS software, found awesome small-footprint hardware and installed it at malvern as a trial.

What we have discovered so far is that people are familiar with self-checkout, there is no hesitancy. An unexpected use is by people preferring a discrete purchase.

There have been some questions, like whether there is a camera attached. People like that there is no camera.

One older (80s I am guessing) customer said to me they were surprised to see self checkout in a newsagency and then went on to say they love the innovation, shows you’re keeping with the times he said as he headed out the door.

While I don’t see self checkout becoming a big thing in newsagencies, nor in many smaller independent shops for that matter, there are situations where it is an ideal solution. This is why we invested money in the new software. The development project had to overcome some tech hurdles which resulted in knowledge that will help in other areas of the software.

Software innovation is important in all retail channels given the rapid changes we are seeing in how, when and where people shop as software innovations facilitates retail innovation. What could be sold from here could be quite different to what people pass across the counter to purchase.

This is, in part, what the trial install is about – learning what could be.

While I mention this is a first. If I’m wrong, please comment on this post so the record can be corrected.

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newsagency of the future

Newsagents: are you tech-ready for the new Weekday Windfall game from The Lottery Corporation

As I wrote here on May 3, the tech implementation by The Lott for the new game has been selfish and poor.

Despite strong protests from me to senior management at The Lott, they, in their infinite wisdom (bless them), plan to reuse a product code for the new game. This  code is currently linked to a payout department.

In our opinion, this is a seriously stupid and dangerous move by The Lott. They should have used a completely new product code.

Failure to adhere to the steps outlined in our knowledge base advice will result in all sales for the new Weekday Windfall game being treated as payouts or lotto wins. This risks you disbursing funds to customers by mistake.

Have you taken steps with your newsagency software to be ready? If you haven’t, and a mistake at the sales counter is made, it could be expensive.

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Lotteries

The Australian Financial Review all but out of Western Australia

This note has been sent to newsagents by Nine Media:

Supply of The Australian Financial Review

Nine has been notified of a substantial increase to printing costs of copies of The Australian Financial Review (the AFR) supplied to newsagents, distributors and sub-agents in Western Australia.

As a result of these increased costs, the supply and distribution of print copies of the AFR in Western Australia is no longer commercially viable.

Our existing print distribution arrangements for the AFR to newsagents, distributors and sub-agents in Western Australia will cease effective close of business on Wednesday, 22 May 2024. Your business has been identified as currently receiving print copies of the AFR and as a result, you will no longer receive these print copies effective close of business on Wednesday, 22 May 2024.

We will be contacting all AFR subscribers to advise them that home and office delivery of print copies of the AFR will no longer be possible after that date.

We kindly request that you make a copy of this notice available to any sub-agents or other retail outlets supplied and billed by you (i.e. those retailers who do not have a direct account with Nine).

Separately, Nine will distribute retail copies of The Australian Financial Review Magazine and the quarterly Fin! magazine in metropolitan Perth from the end of the month. If you are interested in receiving supply of any other publications that Nine may determine is commercially viable to distribute within Western Australia from time to time, please notify us of your interest via email at circsales@nine.com.au

We thank you for your past support of The Australian Financial Review. If you have any questions in relation to this matter, please contact us via email at newsagencycontracts@nine.com.au.

It’s an odd move by Seven West. Maybe they think this may help with sales of their local paper or boost interest in their new online after nine product. It will be interesting to watch how it plays out.

Aussie daily newspapers have hung on to print editions for longer than in plenty of other parts of the world. While I am no expert, I suspect that somewhere around half the daily newspapers in Australia are not profitable on the majority of days they publish. They are thin and loaded with ads from a small group of businesses.

I suspect that if were see a capital city daily close it’s print edition, several others would follow quite quickly.

There is no upside for print newspapers. Publishers have repurposed the print product to rely far less on news and to give advertisers more control of their once respected mastheads. Smart newsagents long ago adjusted their businesses to not rely on them.

Newspapers themselves are inefficient products with more than 75% of newspaper purchases in a newsagency being a newspaper and nothing else. This basket inefficiency has been a challenge for our channel for decades. Back in the 1990s the inefficiency percentage was 85% or more. It has dropped a little, not enough though and this is despite extraordinary effort to engage with newspaper shoppers to try and sell other better margin products.

In their treatment of newsagents over recent years, newspaper publishers have shown little respect. Our margin is down, which makes newspapers less valuable. It’s at a point that there are newsagents in our channel who no longer sell newspapers.

What’s happening in Western Australia with The Australian Financial Review is interesting yet far from the bigger story about newspapers that is playing out nationally.

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Newspaper distribution

Inspiring newsagency transformation: Mount Lawley News, WA

Matt bought a traditional newsagency shop in late 2021. It was his first retail business. He knew he wanted to reinvent the business, to be relevant and appealing.

In less than 3 years Matt with his family and team have transformed the business into a thriving and loved local shop in Mount Lawley 10 minutes out of Perth.

While it’s called Mount Lawley News, this shop is not a newsagency, not what you think of as a newsagency. It’s a gift shop, a fun place to shop, somewhere you’re likely to find a gift for just about any occasion.

As Matt shares in this video, he embraces the opportunities of change, and he shows that even though the shop has been transformed, he’s not done. What he has created online through the website as well as on social media is fresh, engaging, and successful.

I are grateful to Matt for the opportunity to find out more. Be sure to check out their website: http://www.oliviaandgrace.com.au.

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Newsagency management

How is the Aussie newsagency travelling in 2024: looking at retail sales January through April 2024 vs. 2023

Looking at sales in your newsagency from January through April 2024 versus 2023 is useful. Knowing your results is more important than the noise from news outlets on retail sales.

While it’s not a full-on benchmark, I’ve seen data for enough businesses to share the following as reasonable results with which to compare your business when looking at sales for the first four months of this year compared to the same period in 2023 for traditionally core categories:

  • Magazine unit sales: down 8%.
  • Newspaper unit sales: down 5%.
  • Stationery sales: up 3%.
  • Card sales: up 2%.

If your results are outside these, consider what you are doing in the business to change the situation. There could be a good reason your numbers are different. It could also be that the business is challenged in ways you can positively impact.

There are many things we can do in our businesses to drive sales growth. The key is taking action to achieve this. Success won’t seek us out, we have to seek it. Please forgive this cliche … but it is true.

Stationery is having a good moment, growing sales is easy. cards, too, respond to care and attention from you, especially if you are tactical in chasing the impulse purchase.

The big winner is gifts. What we can sell in our shops has changed so much. The price range we can offer has changed too. Gone are the days of newsagents targeting gifts that cost $25.00 or less. I love hearing from newsagents when they have sold their first $300+ item – it opens their mind to expanding their gift offer further.

I own a newsagency on Glenferrie Road Malvern, in Melbourne. For decades it was a traditional newsagency, owned and well run by one family: huge in magazine sales and strong in newspapers, cards and stationery.

Since I bought the business we have engaged in evolving the business while not anting to hard the existing core. It’s working. We are attracting new shoppers and winning new category revenue while maintaining good core sales.

Switching card companies provided a huge boost and continuous evolution of the card mix in the 2+ years. Introducing gifts is working well as is the introduction of sensory products, multi-generational plush as well as homewares.

What we stopped early on that helped too: we got rid of the drinks fridge, the ice-cream fridge, candy at the counter and 20% of the magazine space. Now, in cutting the magazine space, we did not cut any titles – we have maintained excellent magazine sales: $100,000 in January through April 2024. Special interest titles are the biggest segment, accounting for $20,000 in sales in the first four months this year.

All of this has been done on a minimal budget in a step-by-step approach, following opportunities revealed in the data.

Please take a moment and compare your January through April 2024 with 2023. See what’s working and what’s not. If you see in this things that need attention, get to it. If you are not sure what your comparison shows, feel free to reach out. I’d be happy to take a look and comment back to you on a confidential basis. I’m at mark@towersystems.com.au or 0418 321 338.

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Newsagency management

URGENT IMPORTANT NOTICE. Changes Required by Newsagents to handle the new Weekday Windfall Game

The Lott has informed Tower Systems via XchangeIT about changes slated for May 6 to accommodate the Weekday Windfall game launching on May 20.

Despite strong protests from me to senior management at The Lott, they, in their infinite wisdom (bless them), plan to reuse a product code for the new game. This  code is currently linked to a payout department.

In our opinion, this is a seriously stupid and dangerous move by The Lott. They should have used a completely new product code.

Failure to adhere to the steps outlined in our knowledge base advice will result in all sales for the new Weekday Windfall game being treated as payouts or lotto wins. This risks you disbursing funds to customers by mistake.

Act now to prevent this. Here is a link to advice for Tower newsagents: https://help.towersystems.com.au/portal/en/kb/articles/lotto-setup-new-products

Here is the response from The Lott once I had explained to them the risks involved in reusing a product code:

I appreciate that you some concern about reusing product ID 22 however due in part, to some code capacity issues, a decision was made to use this code for the upcoming Weekday Windfall. Please note, that all terminal development which includes the use of product ID 22 for Weekday Windfall has received regulatory approval and is unable to be changed.

Newsagents are at risk here.

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Newsagency management

Inspiring retail: newsXpress Leven, Ulverstone, Tasmania

This business has been in the family for decades, across two generations. What was once a traditional newsagency is today a vibrant gift shop that has some newsagency lines as a service for customers.

This shop is an excellent example of doing it yourself and creating something genuinely local, warm, comforting and clearly loved.

This shop also shows that you can succeed by trading outside of what people expect for your type of business, that today in retail, your shingle does not have to define your business.

Ulverstone is a wonderful local community, a beautiful part of the world. What Sharene and Wayne have created at newsXpress Leven is a shop people love to visit and spend money in.

Often, local retailers can get caught in their head about what they could do in their business. Seven years ago, Shareen and Wayne set about embracing change, and they haven’t stopped since – creating a business of which they can be proud.

It was a thrill to see what they have created.

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newsagency of the future

Local retail management advice: How to partner with local community groups to win new shoppers, increase sales and support your local community

Talk about a win, win, win. This local retail business management tip helps you win new customers, your customers save money and a local community group raise funds. Engagement is measurable, so you can assess the return on your investment.

Find a locally loved and trusted community group in need of funds, a group that has a reasonable number of members who do not currently shop with you.

Offer the community group a percentage from each purchase made by members of the group and their family members.

Offer each member a discount for each purchase.

The amounts offered need to be considered in the context of your business, your margin and the value of the anticipated additional purchases.

Consider a timeframe for the offer. For example, it may be useful to trial the offer for a limited period so you can assess engagement and then adjust as appropriate. It may also be an offer only open to certain days of the week, your quietest days.

Consider the products to be included in the campaign. It may be appropriate to exclude products categories where your margin is not enough to justify inclusion.

To manage the offer, see if your Point-of-Sale software can help. I know the software from my own software company can manage this. You give each community group a member a card, which when scanned ensures they get the discounted price and the donation to the community group is tracked.

The card becomes valuable itself, something talked about, sought after.

The commercial goal of this campaign has to be net new shopper traffic for the business delivering revenue the business would otherwise not have achieved. If this is the case, a discount off the usual margin achieved is acceptable as it is effectively a cost of acquiring the additional business.

Key to the success of this campaign is the active engagement of the community group in rallying members to visit the shop, to encourage them to support you so that you support the group they love.

Make an event of handing over the donation to the community group. Get photos. Talk on social media about being grateful for the local support that has enabled you to make the donation.

Share stories on social media about the activities of the group as your support of them can encourage their support of you.

I love the campaign outlined here as it represents the circular nature of the local community: people living locally, shopping locally, enabling local shops to thrive locally and support loved local community groups.

Using POS software you can easily manage this, and adjust the offer based on the results.

I wrote this article for the latest issue of the Channel magazine published by ALNA.

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Newsagency management

Retail transformation: Wattle Bee Next Mount Morgan QLD

Retail transformations are challenging in an ever changing retail landscape. The challenges are compounded when you’re in a small population regional town and in a retail channel that itself is undergoing extraordinary and rapid change.

Rather than following others, Kerrilyn and Schae at newsXpress Mount Morgan evolved their newsagency into something unique, wonderful and loved. They made their business a destination and refused to be limited by assumptions about what their type of business should be.

This video shares some of their journey and reflects on a business the people of Mount Morgan love. It also plays against assumptions about the local newsagency: what it is and what it can be.

I am grateful to be a small part of this inspiring story.

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Newsagency management

Some airport shops are a rip-off, like the shop in Brisbane selling a bag of Smarties for $8.99

$8.99 for a bag of smarties that I can buy at a supermarket for $5.00 or at a discount confectionery shop for $4.00. I saw this in a shop at Brisbane domestic airport a week back. Crazy pricing.

Now, of curse, there will be factors impacting this: retail lease costs for one. The other big on being a captive market, little competition.

The prices were not turning shoppers off. Plenty of people were paying over the odds for stuff at this shop.

The experience had me thinking about the choices we make when we price items, especially readily available everyday lite=ms, like this bag of smarties. Our pricing decision tells shoppers something. It told me this shop is expensive and reminded my of why I don’t shop at airport shops.

One way to help shoppers understand your prices is to speak to factors that play into your pricing decisions. You could do this on social media or even by equipping shop staff with information.

If I sold these bagged Smarties, for example, and if my price was considerably lower than $8.99, I’d share the story from Brisbane airport on my social media to be grateful that I could sell them for less – hopefully not in a bratty way. That type of personal experience social media post can be a good way to share a pricing comparison that can reinforce your proposition.

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Newsagency management

A good read for retailers: The Effect of Least-cost Routing on Merchant Payment Costs

The Effect of Least-cost Routing on Merchant Payment Costs, an article by Boston Dobie and Benjamin Watson and published by the RBA is a valuable read for retailers interested in the cost of cashless payments.

The conclusion pitches the value of least cost routing.

This article introduces new estimates for the potential cost savings for merchants from enabling LCR. We estimate that on average LCR is associated with a nearly 20 per cent lower cost of acceptance for debit card transactions, with potential cost savings being largest for small merchants and those on plans that blend together prices for different card types. The results presented primarily capture the savings from LCR for in-person transactions using physical cards, given the limited availability of LCR for online and mobile wallet payments. As LCR becomes more readily available for these types of transactions, the potential savings should be higher given they account for a significant and growing share of debit card payments.

Plenty of newsagents had access to and benefited from least cost routing years ago. There is an even better (lower cost) option now with a cost plus model.

At the very least, newsagents should be on a least cost routing model. If you are not on that or a cost-plus model, you are likely to be paying more than you should. And, if you surcharge and think it’s not your issue, customers will notice the cost of a surcharge.

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Newsagency management

The one tip that helps customers choose a Mother’s Day card

I customer was wondering whether the card in their hand was right or whether they should shop elsewhere. “Have you checked the back of the card”, I said. They turned the card over and saw that the purchase supported the McGrath Foundation and that the card was Australian made. They bought the card.

Australia made matters with plenty of shoppers, as does a good charity connection.

If your Mother’s Day cards are Australian made and they pitch a good charity connection, ensure everyone working in the newsagency knows to gently suggest customers look at the back of cards they are considering.

Supermarkets are too disengaged with shoppers to do this. The same with department stores and discount variety shops. Newsagent can own this turn the card over engagement. Well, at least those of us with cards made in Australia.

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marketing tip

Pitching newsXpress

Yes, this is a marketing pitch from me about newsXpress, the newsagency marketing group I own.

newsXpress is unique, engaged, optimistic and helpful. The newsXpress community is made up of wonderful retailers who support each other and who appreciate the support from a crew of head office specialists in business data, retail business management, local engagement and more.

I am sharing this video to show rather than tell.

Our theme for 2024 is MAKING THINGS HAPPEN.

It’s about action, growth, success and enjoyment for newsXpress members.

We see opportunity for attracting new shoppers, helping existing shoppers spending more and increasing the overall GP% of newsXpress member businesses.

This is what MAKING THINGS HAPPEN is about.

In December 2023, participating newsXpress members each made, on average, $3,500 gross profit from a product opportunity we accessed without any downside risk. Plenty made twice this.

In 2023 we helped a member deal with challenging cashflow, another with employee theft, another with an exit strategy and another with a complex competitor situation.

We also helped a retailer cut their rent by a third.

Nothing we pitch is mandatory.

Online is the biggest opportunity of 2024 without a doubt. The latest benchmark for Aussie retail reports online as 10% of total business revenue.

In the Aussie newsagency channel, the average figure for those with a website is under 5%.

If you don’t have a website, what would a 5% bump in revenue feel like?

We have businesses we have helped achieve a 20% bump in revenue in a year from online.

We leverage our Tower Systems experience and our newsXpress experience exclusively to help you be open 24/7, serve new shoppers and add valuable net profit in using existing overheads. Our skillset is unique, our experience backed by plenty of success.

newsXpress exclusive. We offer access to a half price, fixed price, beautiful Shopify website connected to your Tower POS software. We back this with advice and mentorship to help you find a profitable niche you like.

If you can’t increase local physical shopper traffic, online is a smart move to improve business reach and profitability.

One newsXpress member launched a website with us last year and added $50,000 in good margin revenue in six months.

Another newsXpress member used their website to pitch an entirely new product category and found a profitable second business as a result, using existing labour and facilities in the shop.

We showed another newsXpress member how to expand the reach of their website and within two months they achieved thousands in additional good margin revenue.

We’d love to connect you with some of these retailers so you can hear for yourself what is achievable.

12 likes
newsagency marketing

Why is Nine media paying WA newsagents a lower percentage to sell The Australian Financial Review? And, at what point is the paltry margin NOT worth it?

Retail newsagents in Western Australia make 7.8% gross profit from selling the weekend edition of The Australian Financial Review while east coast retail newsagents make 10.6% for the same product. Here is the evidence. First up, the WA notice:

Now, the east coast notice:

Both of these notes come from Paul Munro, Director, Circulation Sales & Operations Nine Publishing, who is based in Sydney.

They value Western Australian retail newsagents less than their east coast counterparts, yet labour and occupancy costs in WA are the same as elsewhere.

Then there is the broader question of whether stocking the AFR is worth it to any retail newsagent. By the time you unpack the product, count what you have received, place it in-store and do other requisite overhead, 10% does not cover costs and that does not even account for theft, for which the retailer is responsible.

Maybe the newsagents who no longer sell newspapers have made the right move.

In the past when I have raised margin with newspaper and magazine publishers and mentioned supermarkets, they have said supermarkets get the same margin. When challenges, a couple have mentioned that there are other fees paid to supermarkets for stand placement or, back in the day, guaranteed checkout pocket placement. I am not sure if Nine Media has any such arrangement in place for supermarkets.

An adult retail employee working in a newsagency on a Saturday is paid $36 an hour or more. Assuming trading 7 days a week and considering average occupancy costs outside of a shopping centre, the daily rent and related costs for an average size retail newsagency will bet $250.00 or more. So in just these two cost points, a retail newsagency needs to cover $538.00 in costs. Based on the industry average GP% range of 28% – 32%, they need sales of $1,793 to cover costs.

But that’s not accurate as it’s based on average GP%. A product like the AFR on the weekend drags the average GP down. Newsagents selling it rely on better margin products, like cards that achieve 60% GP and more, and gifts that perform similarly, to subsidise poor margin products, like newspapers and magazines.

Publishers created the Australian newsagency channel in the 1800s. They controlled us for decades. Then, they abandoned us. Today, they disrespect us with paltry margins. They make matters worse with out of date practices that waste time and make us uncompetitive.

They price their product as if it has other benefits, like attracting shoppers. That may have been the case ten or more years ago, not today in 2024. Newspapers are offered as a service, a loss making service.

I suspect publishers treat newsagents this way because they know newsagents will not do anything about the situation.

26 likes
Newspaper distribution

What’s the situation with selling vape products in Australia?

This is a question I was asked yesterday when I was talking with a retailer who has vape products for sale. I directed them to the Therapeutic Goods Administration website. The TGA is the federal government agency with regulatory authority for therapeutic goods. Vaping products fall within their remit. Here’s some of what the TGA website covers on vaping products:

From 1 January 2024, the importation of disposable vapes will be prohibited, subject to very limited exceptions. The ban will apply to disposable vapes irrespective of nicotine content or therapeutic claims. It means that it will be unlawful to import disposable vapes on or after 1 January 2024, even if those vapes were ordered before 1 January 2024 and have not yet arrived in Australia.

The ban also applies to individuals who have ordered disposable vapes from overseas for therapeutic use under the personal importation scheme. A limited exception will apply to international travellers arriving in Australia to carry a small quantity of vapes for their treatment or the treatment of someone travelling with them under their care.

Disposable vapes that have been imported into Australia before 1 January 2024 may continue to be lawfully supplied in Australia subject to the following requirements:

  • disposable vapes containing nicotine that meet TGA requirements may continue to be lawfully supplied in Australia in pharmacy settings to a patient with a prescription in accordance with state and territory laws for prescription medicines,
  • disposable vapes that do not contain nicotine, or any other medicine, and do not make therapeutic claims, may be supplied by retailers generally, including vape stores, subject to state or territory law.

This will allow legitimate retailers of disposable vapes to run down their stocks prior to the Government introducing legislation in early 2024 to prevent the domestic manufacture, advertisement, supply and commercial possession of disposable vapes, to ensure comprehensive controls across all levels of the supply chain.

From 1 March 2024, the importation of all non-therapeutic vapes will be prohibited. This means that it will be unlawful to import non-therapeutic vapes on or after 1 March 2024 even if those vapes were ordered before 1 March 2024 and have not yet arrived in Australia.

In addition, the importation of all vapes under the personal importation scheme will end on 1 March 2024. From this date, patients will no longer be able to order vapes directly from overseas, even if they have a prescription.

A limited exception will allow international travellers arriving in Australia to carry a small quantity of vapes for their treatment or the treatment of someone travelling with them under their care.

Subject to state or territory law, non-therapeutic vapes imported before 1 March 2024 may still be lawfully sold by retailers generally, including vape stores, provided the vape does not contain nicotine or any other medicine, and does not make therapeutic claims.

This will allow legitimate retailers of non-therapeutic vapes not containing nicotine to run down their stocks prior to the Government introducing legislation later in 2024 to prevent the domestic manufacture, advertisement, supply and commercial possession of non-therapeutic vapes to ensure comprehensive controls on vapes across all levels of the supply chain.

The website for the Minister for health also comments on this, making the government’s position on vape products clear:

During 2024, product standards for therapeutic vapes will also be strengthened, including to limit flavours, reduce permissible nicotine concentrations and require pharmaceutical packaging. A transition period will be allowed for businesses to comply with the new requirements.

The Government will introduce legislation in 2024 to prevent domestic manufacture, advertisement, supply and commercial possession of non-therapeutic and disposable single use vapes to ensure comprehensive controls on vapes across all levels of the supply chain.

It’s clear that there is no future for vape products in retail outside of pharmacies selling therapeutic products.

5 likes
Ethics

No, it won’t sell here, it’s too expensive, our customers would never buy a $550 plush item, not in a million years.

Of course, it sold in less than a week, six weeks before we had to pay for the stock. And, we sold another one from the same range for full retail at $350.00. And, another after that. Oh, and another $1,000 from the range in less than a week of getting the stock. Now, in week two, more sales, more money made.

The mistake of the nay-sayer in the business was to regard it as a plush item. Okay, it is a plush item, but, people are bot buying it as a plus item, they are buying it as a collectible, a very special collectible – rare, celebratory.

They people buying are 35+, not your traditional plush shoppers. males, too – again, not traditional plush shoppers.

Now before you jump to conclusions, the success I am writing about here is in a small suburban newsagency. It’s not in a shopping centre. The area is middle class, skewing to an older age.

Imagine losing several thousand dollars in sales by saying no, it won’t sell here, it’s too expensive, our customers would never buy a $550 plush item, not in a million years, denying your business the opportunity. We do, though. I’ve done it for sure – said something won’t sell without trying it.

Now, I am not saying try everything. What I am saying is that your immediate instinct is to say no, check in with yourself. Question why you are saying no and allow yourself a moment to think you might be wrong.

Being open to something means thinking through the opportunities, it means researching:

  • The current interest in the brand.
  • Who else stocks the product.
  • Whether there is an online opportunity.
  • Allied products you may have or could stock.
  • The value of the demographic to which it may appeal.
  • The opportunity to attract net new traffic through the product.
  • The risk and wether you have capacity for this.
  • The possible upside.
  • A recall of how often you have been wrong before.

This may seem like hard work. In the contest of the product I am referring to in this post, in two weeks it is a $1,500 GP beneficial range that I am sure will track to be worth $10,000 – $15,000 to this one business through the rest of 2024. This is valuable. It’s a result we can expect because we did not buy in on the instant no thanks when first looking at the possibility.

Our local Aussie newsagency businesses should not be defined by our own ignorance, they can be more successful than our imagination sometimes allows.

What we can sell, how we can sell, when we can sell and to whom we can sell is different today then. a few years ago and to when our channel was created.

8 likes
Newsagency opportunities

Telstra Modem Model v7610 issue drags on, impacting some newsagency businesses

In December 20223 a number of newsagents reported issues accessing magazine supply electronic invoices. The issue was quickly isolated to being experienced by those with a specific model of Telstra modem. The specific problem was tracked back to having been caused by a Telstra initiated update.

Here we are in April 2024 and some newsagents continue to have problems. Most recently, it has related to the v7610 modem.

The challenge for impacted newsagents is that it an issue for Telstra to resolve, and their resolution has not been as forthcoming as it could be. Their call centra process is not geared to discussion about a problem. rather, they have a series of narrow questions and if your words are outside what they expect you can find yourself down a time-wasting rabbit hole.

XchangeIT is the newsagent partner most impacted with their magazine electronic invoices not getting through via the usual automated route. While they have a backup process, their hours are not a good fit for hours when newsagents might be doing this work. That said, their communication to newsagents on the issue has been excellent, as has their communication with newsagency software companies.

 

3 likes
Newsagency management

Putaways facilities in smart newsagency software offer newsagents a differentiating customer service experience

In your newsagency software you likely have facilities you can leverage to offer a point of difference. Whereas decades ago, cutaways facilities were essential and in use in almost all newsagencies, today their use is much less.

In the competitive world of retail,  offering a differentiating customer service experience is crucial for success. Smart newsagency software with putaways facilities can be your secret weapon in this battle.

Putaways allow newsagents to set aside specific stock for individual customers. This could be anything from the latest copy of their favourite magazine to a particular brand of cigarettes they only buy from you.

A customer registers for a product to put away, put aside, kept for them. When the product arrives, a label with the customer details is printed and placed on the product. The product is put aside in a safe place. The customer can be notified by email or text.

Putaways offer a range of benefits that contribute to an exceptional customer service experience:

  • Convenience: Customers know their favourite items will always be waiting for them, saving them time and frustration.
  • Loyalty: This personalised touch shows customers you value their business and encourages them to keep coming back.
  • Increased Sales: By highlighting upcoming releases or special orders, putaways can prompt customers to purchase additional items.
  • Reduced Shrinkage: Knowing exactly how much stock is allocated for putaways helps with stock control and minimises shrinkage.

While putaways are a powerful tool, managing them manually as newsagents did in the 1970s and before is time-consuming and error-prone. This is where smart newsagency software comes in. Newsagency software:

  • Electronically record customer preferences: Store customer information as to items they would like put aside.
  • Set up automatic putaways: Automate the process of reserving stock for specific customers, saving you valuable time.
  • Generate notifications: Alert customers when their put aside items are ready for collection, further enhancing the customer experience.

I mention it today as there are opportunities outside the traditional use of putaways – magazines, newspapers and artworks – where newsagents can use this part of the software they have to satisfy customers buying additional releases or issues of something that has a life beyond a single release. The software solution offers structure and consistency that other retailers in their software would be challenged to match.

Of course, I have a vested interest in that I own Tower Systems, the newsagency software company that I am grateful serves now more than 1,850 newsagents with newsagency software in Australia.

4 likes
newsagent software