Australian Newsagency Blog

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

Woolworths is selling Darrell Lea products for less than the wholesale price to small business newsagents

Mark Fletcher on May 27, 2019 12:38 PM

Competing on price is impossible some days.

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Take care before entering into a high interest loan for your newsagency business

Mark Fletcher on May 27, 2019 6:15 AM

The easier it is to arrange finance for a business the greater the likelihood that the finance offer is not a good deal.

I saw this recently when asked for help by a newsagent who had entered into a loan with a loan business. They borrowed $60.000. They had an urgent need for $35,000 but took the higher amount following a pitch from the finance company. They expected to be able to pay it off ahead of the due date.

In the contract, which they did not read because they were in a hurry, was a condition that while they could pay it off before the due date, the full interest for the original period was payable and that, in fact, interest was paid first before principal.

The interest rate was 18%. Fees to establish the loan were 5%.

In my review of the situation, there were alternatives to solving the $35,000 problem that could have been better than the high interest cost and high cash flow impact that had a knock-on effect in the business.

While I am not an accountant or a financier, my suggestions to newsagents or any small business retailer looking at urgent funding needs are:

  • Look at alternatives.
  • Take time.
  • Get a second opinion.
  • Be absolutely sure of all of the terms and conditions.
  • Borrow only what you need.
  • Never miss a payment.

There are companies promoting their services to small business retailers, offering fast and easy access to finance that is not good finance.

Buyer beware.

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The high cost of council works

Mark Fletcher on May 26, 2019 7:59 AM

I know of newsagents in Australia who are in a similar situation to this UK newsagent:

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Checking social media…

Mark Fletcher on May 26, 2019 7:55 AM

An interesting tweet mentioning our channel:

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An offer from newsagency marketing group newsXpress to help newsagents create more valuable businesses

Mark Fletcher on May 25, 2019 7:21 AM

All of us in small business retail understand the value of being unique, the importance of having those products or services no one else has. It is referred to as your USP, your Unique Selling Proposition. Businesses with a genuine USP are more successful.

Recent years have been challenging as newsagents have had to confront declines in core products, competition from online and more. A USP helps you cultivate good news.

The best way newsXpress can speak to you about USP is through what we offer you if you join newsXpress. Here are some of the newsXpress differentiators:

  • Genuinely valuable in-store visits. One of our retail experts visits your store several times a year, looking for opportunities to make your business successful. They gently offer encouragement and suggestions. Nothing they suggest is mandatory.
  • Exclusive new traffic suppliers. We have preferred suppliers in our portfolio who can help you attract new shoppers, like the Royal Australian Mint – we are the only group they work with. The success our members are achieving is wonderful.
  • New traffic strategy. We offer well researched, fact based, papers that lay out a pathway to attracting new shoppers. These papers outline the goal and simple to follow steps that can be taken to achieving the goal. Nothing is mandatory. Our research papers offer alternatives you can consider in terms of your local situation.
  • Exit strategy. We know plenty of newsagents look to the day they can leave their business. We have a structured plan they can follow to maximise the opportunity, to smooth the path to sale and retirement or whatever is next in life.
  • Engaged business building networking, not roadshows. We host regional cluster meetings to make it easy for members to work with each other and our team to create more successful businesses. We support and encourage each other.
  • Online. We offer a comprehensive, integrated and growing online strategy, through several consumer facing websites that attract shoppers our retailers may never have served otherwise. Every newsXpress member also has free access to their own local website that is completely within their control.
  • Saving money in the back office. We can help you get the best deal on insurance, eftpos fees and more. Our lease help has resulted in plenty of newsXpress members saving money on lease renewal.
  • Mental health support. Thanks to our engagement with Beyond Blue, Headspace, Men’s Shed and others, we have a structured kit of advice and support for any newsXpress member confronting mental health challenges. Our help reaches beyond the business for those keen to engage.
  • Better buying. We put this last because it is what some think should be first. We have access to supplier deals that are awesome. Yes, preferential pricing and preferential terms. While we understand that many newsagents see this as what a group should do, for us, better pricing is one piece of a large jigsaw of services we offer. It’s valuable, but not all that we do.

newsXpress offers much more than this list.

Our head office team… newsXpress has twelve full time employees working on behalf of members. Included in this team is our merchandise expertswho work with members on product ranging and buying. Following their advice is not mandatory. They can go as far as putting together suggested orders. The action you take is completely up to you.

Our leadership team… is there for you, on anymatter, offering an ear, a hug, advice or representation, on any matter. We will help as much as we are able. We see the newsXpress community as family.

Find out morePeter Francis is our National Sales Manager. He has served newsagents for decades, at John Sands and then For Arts Sake. Peter has been with newsXpress for five years. He is a loved and respected member of our team. Call Peter on 0423 298 020. Ask him any question. You can email Peter, too, on peter@newsxpress.com.au.

Who makes the money? While newsXpress is privately owned, there has never been a profit distribution. Every cent has been reinvested in the business, in TV ads, flyers, technology advances, free conferences and more.

What does it cost? The monthly newsXpress membership fee is currently $375.00 (inc. GST). There is a sign on fee and a setup fee of $2,500.00, which we will waive for you.

Special offer. Contact Peter Francis for details.

This is a letter I recently sent to newsagents. I am the Managing Director of newsXpress.

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Gifts in the newsagency

Mark Fletcher on May 24, 2019 3:09 PM

I love this display of a unique line of gifts in one of my newsagency. Shopper engagement is terrific.

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The newsagency counter

Mark Fletcher on May 24, 2019 12:04 PM

I love the different look behind the counter, facing shoppers, in one of my newsagencies right now.

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If you compete with the Reject Shop…

Mark Fletcher on May 24, 2019 5:52 AM

The Reject Shop appears to be in challenging times, according to a report in The Age.

The Reject Shop will part ways with its chief executive and has revealed it is heading for a full-year loss, as sales evaporate and it cuts prices amid fierce competition from supermarkets and department stores.

The discount retail chain on Thursday said it now expected to run at a loss of $1 million to $2 million this year – a downgrade from earlier guidance for a profit of $3 million to $4 million.

The ASX announcement from the business has more details:

In addition, Gross Margins have fallen as the expected benefits from Sales and Merchandise related initiatives have not landed with consumers during the half. This margin pressure has been exacerbated by the competitive pricing pressure placed on a number of key Sales Departments from both the major Supermarkets (FMCG) and the Department Stores (General Discretionary Merchandise), forcing price roll-backs across a number of key lines as the business looks to maintain its price gap in the market.

Non-product related costs including Store Wages, Occupancy Costs and Head Office Costs have been well controlled during the half, with material cash reductions on rent renewals still being delivered.

This will be good news to newsagents competing with the discount retailer. I have been tracking them this year because of their creeping into more areas in the gift, card and related categories. I thought they were doing well in the context of their type of retail.

For what it’s worth and thinking about today’s news, I think the Reject Shop is encountering challenges because of renewed focus from K-Mart, supermarkets and because the Reject Shop approach to retail is not what shoppers look for today.

The days of retail shelves being full as a sales approach are over for now. Shoppers want engagement, experiences. Give them this and sales will increase.

I visit a couple of Reject Shops regularly to watch their changes and offering experiences is not something I see.

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Diversity in retail

Mark Fletcher on May 23, 2019 6:10 AM

Here is an article I have recently completed about diversity in retail, as a management approach to help you attract more customers to your business. I have been thinking about diversity because of an inspirational presentation I heard by Aubrey Bergauer, Executive Director of the California Symphony, in which she outlined how a commitment to diversity has helped the Symphony become more successful.

Diversity in retail.

This is not about what you may think it is about.

For years, retailers, especially small business retailers have been told do one thing right, be known for something.

They have been told that a unique selling proposition(USP) is about that one thing and getting it so right that you are known for it.

This singular focus began in an era when people often discovering a business did so by being in front of the business.

While pursuing a USP has worked for many, the world today has changed. Technology has changed us, it has changed how people find retail businesses.

Whereas in the past, there was often one major path delivering traffic to a business, today, thanks to technology, there are usually many paths, often not as obvious to us as the path of years ago.

Technology has also changed what businesses can and do offer.

Most important, technology has changed the ease of reaching customers.

Being local is not as important as it used to be.

While local small business retailers wish being local is all that matters, it is not. Often, the local community is not sufficient to serve the growth needs of a business, often because locals themselves are shopping elsewhere because doing so is easier.

Retailers need to reach more people. This means reaching beyond what has been traditional. For local retailers it means reaching beyond local. It can mean reaching beyond what you are known for.

Thanks to cool personalisation technology and targeted marketing, businesses interstate or overseas can provide a special interest product in a way that locals can love. Big businesses, especially, can leverage technology to reach local shoppers in personal and local ways.

Being local is notas important as it used to be for plenty of specialty retail businesses.

A commitment to diversity could help local retailers in this changed world.

I am not talking here about diversity in the manner in which the term is often used.

To me, diversity in small business retail is about a business, your business, being diversein the customers it pursues and diversein the ways it seeks to connect with potential new customers.

Customer diversityis about being relevant, appealing and of value to different groups of customers to those you pursue today. No, not everyone, because that does not work.

Diversity in customers is about targeting very specific, new, groups that you are certain you can satisfy.

Why do people shop with you?

Think about what brings people through your front door right now. Typically, a majority of shoppers will come through for one reason, one product or service category.

Is there another product or service category not too distant from what you focus on today that you could introduce to broaden the appeal of the business, to help you reach people who are not interested in your prime product category or service today?

This is one example of diversity … making your business appealing to a group of people who do not find your current offer appealing.

It is not about becoming a general store. Rather, it is about making thoughtful moves, based on research, to broaden the pool of people who couldwant to shop with you.

This is about you reaching more customers.

Diversity in ways of connecting with potential new customersis about how you communicate, how you connect.

Multiple touchpoints matter in this connected world.

While we all get sick of emails, text messages, social media ads and the like, they are sent for a reason, by big businesses with strong tech infrastructure to take care of this follow up.

Think about the new shopper journey in your shop today. Think about how they found you. In small business retail, word of mouth remains important as does store location. But what about other new shoppers, how can they be found?

Diversity in how, where and when you promote your business matters as does diversity in your voice.

How you reach out to an older shopper should be different to how you reach out to a young mum.

How you reach out to someone new to your core product category should be different to how you reach out to someone deeply engaged with your core category.

A more diverse pool of shoppers requires a more diverse approach to find them.

Here’s what I mean: use diverse avenues of marketing and through these use diverse marketing pitches, targeted for a more diverse pool of customers.

Marketing avenues can include social media paid and free, Google Ads, with each being thoughtfully created to pursue a specific type of shopper, one that fits a diversity goal.

Just as you expand what you offer to appeal to new consumers, you expand how you appeal to reach new customers.

Local businesses often promote local. It made sense for years. Today, specialty retailers can easily sell outside the local area, making a commitment to diversity also being about reaching beyond local as that in itself is about pursuing diversity.

It’s about more than what you are known for today.

Here is what it comes down to. What you are known for today is not enoughsince that will limit your appeal to customers interested in that. Smart and tech engaged businesses are chipping away at your core, what you are known for.

Thoughtfully, carefully, broaden the appeal of your business through what you sell and how you pitch. Pursuing a more diverse pool of customers will buttress your business, help it weather change.

This is why diversity matters. It is why you have to make your business appealing to more people and why you have to be more diverse in how you try and find them.

Now, an action plan.

Write down your target customer today. Describe them in a concise way.

Now, think about another customer you could target, a different customer you would like to reach but do not reach today. Think about what you need to do in terms of inventory, shop layout, online engagement and other changes to reach this new customer.

Write down how you promote your business today. Now, think about other ways you could promote your business and other voices, styles, tones you could use to appeal to people you do not appeal to today.

New products, new services, pitched through new voices in new mediums, this is how to attract a more diverse customer pool to your business.

Diversity in retail is simple really. It is about expanding your reach through thoughtful planned actions to reach a more diverse group of customers.

The alternative is to keep doing what you have been doing. That will maintain your current business trajectory.

Mark Fletcher is the owner of Tower Systems, newsXpress and several niche retail businesses.

TO FIND OUT MORE ABOUT TOWER SYSTEMS:

NSW / ACT / TAS: Nathan Morrison. 0417 568 148.
QLD / NT: Justin Randall. 0434 365 789.
VIC / SA / WA: Tim Batt. 0401 833 917.

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Online lottery revenue growth continues for Tabcorp

Mark Fletcher on May 22, 2019 6:22 AM

This, in case you missed the half year results announced by Tabcorp two months ago:

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Business outlook for Ovato (Gotch)

Mark Fletcher on May 21, 2019 5:11 AM

Click here to access an investor presentation fro Ovato, released yesterday. Ovato shares were halted from trading pending the announcement of a share entitlement offer.

As you can see from the half year report and their share price over the last year, it has been a tough time:

Here is a page from the investor presentation that may interest newsagents – not the magazine forecast:

With magazine sales declining, cover prices at five (and more) year ago prices and with GP fixed at 25%, this category is problematic for newsagents.

No wonder….

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Hey News Corp. this is not news, this is not journalism, no, this is political interference

Mark Fletcher on May 21, 2019 12:01 AM

I would not have put this newspaper out for sale. A politician with their face in what could be the crosshairs of a gun? In Australia?

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Apple pitches digital against print

Mark Fletcher on May 20, 2019 6:11 AM

This is the Apple ad playing in a US shopping mall.

This is what shoppers see on phones and iPads in a nearby Apple store:

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The City of San Francisco bans cashless stores

Mark Fletcher on May 19, 2019 6:43 AM

San Francisco last week moved to ban cashless stores. This is a big news story receiving plenty of coverage, like this from CBS:

San Francisco is about to require brick-and-mortar stores to take cash as payment, joining Philadelphia and New Jersey in banning an increasingly popular store policy of snubbing cash. Critics say refusing cash payments harms low-income people and the homeless, who are less likely to have access to credit cards.

And this TV news report:

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Is Julia Gillard endorsing News Corp’s Leader newspapers?

Mark Fletcher on May 18, 2019 2:21 PM

This subscription pitch for Leader newspapers on the Herald Sun website feels deceptive to me. It implies an endorsement from Julia Gillard by prostrating the photo as part of a news story, when it is an ad.

It is also poor form coming from a company that daily sought to tear her from the Prime Ministership.

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If you have Grumpy Cat product…

Mark Fletcher on May 18, 2019 5:45 AM

Grumpy Cat has died. This cat that spawned a worldwide business has lead a celebratory life. Grumpy Cat achieved terrific success in Australia.

If you have Grumpy Cat products, pitch them where they will be seen. Do it respectfully. Interest will be strong I suspect.

If you don’t have Grumpy Cat products but ant to acknowledge the cat’s passing, the image I have included with this post is the official announcement that was shared on social media. Consider sharing this.

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Vale Bob Hawke

Mark Fletcher on May 17, 2019 5:24 AM

Today is a good day to place newspapers with Bob Hawke on the cover at the counter. You will sell more for sure. Today’s paper will be bought by plenty who would otherwise not buy a paper – if you make it easy for them.

Regardless of your politics, it is hard to not wish for a leader like Hawke, he preferred consensus, has a commitment to social justice, did not tolerate racism and steered in great reforms, like universal health care and a significant increase in education engagement.



 

All the pics are from Twitter.

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The economic impact of Aldi in Australia

Mark Fletcher on May 16, 2019 6:04 AM

If you compete with Aldi, even if you do not, this video is worth watching, it outlined their economic impact in Australia:

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Do we need to see old magazine titles retired?

Mark Fletcher on May 15, 2019 5:58 AM

In the online world of e-commerce sites, information sited, podcasts and community forums, it is common to see major rebrands and replacements of old with new.

Fresh is in online. Thanks to excellent and deep engagement data, decisions are made based on evidence. hence the replacement of brands with new.

Looking at the magazine shelves, I think we could do with a bit of this. There are some tired titles that are not viable for newsagents at a GP of 25% of cover price that is not keeping up with CPI.

Newsagents think about these things when looking at space allocation for the category.

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Discount Mother’s Day cards

Mark Fletcher on May 14, 2019 3:36 PM

Maybe I missed it before but it feels like the extent of low-price Mother’s Day cards in supermarkets is bigger than before. This photo from a Woolworths supermarket shows only part of their low-priced Mother’s Day cards. It was better located than the more expensive cards.

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Valuable inventory management mantra for retail newsagents

Mark Fletcher on May 14, 2019 6:09 AM

Never let an item of inventory have a birthday in your business.

This is excellent advice. It is easy to track and easy to manage.

I did some work for a newsagent last year and in stationery alone they had $37,000 worth of inventory items that had not sold in six months and $13,000 of items that had not sold in over a year. That is, not any of the stock of any of the items had sold in the period.

Acting on this starts with tracking it. It is dead set easy. Track it. Identify the dead stock. Quit it. Don’t replace it.

Dead stock is an opportunity cost to the business. It weighs you down and causes you to offer a sub-par shopping experience.

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The Conversation: Mounting evidence the tide is turning on News Corp, and its owner

Mark Fletcher on May 13, 2019 3:33 PM

Mounting evidence the tide is turning on News Corp, and its owner is a terrific article by Dan Himbrechts and published by The Conversation.

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Free flu shots for staff

Mark Fletcher on May 13, 2019 5:50 AM

We offered free flu shots at my office last year through a service we paid for to visit and deliver the shots. This year, we have taken a different approach, to enable people outside of the head office to engage.

This year, we are refunding the $20.00 cost of people getting a flu shot from their GP or local pharmacy. There is a GP near the office offering the $20.00 service.

We announced it last week and the response has been terrific.

Our experience last year was a reduction in downtime as a result of flu in the workplace.

I mention it today as offering the refund is a relatively low cost opportunity for employers to provide an unexpected level of care for team members. It can be a small but useful differentiator in making the workplace more appealing.

This matters in small businesses where hiring people can be a challenge. I know of plenty of businesses where they are looking for ways to compete for staff with other local businesses.

The Health Direct website, from the federal department of health, has excellent advice on flu shots.

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Is Woolworths getting out of magazines?

Mark Fletcher on May 12, 2019 6:07 AM

A couple of people mentioned to me they heard a rumour Woolworths was getting out of magazines. I checked several Woolworths stores, including George St Sydney, and while their magazine offer is patchy (at best)  there is no evidence of them exiting yet.

What does appear to be the case in Coles and Woolworths is a reduction in magazine pockets at or near registers. This location was high value of impulse purchases of magazines. The retreat from the large number of pockets that used to be at registers must have impacted magazine sales in supermarkets.

I suspect supermarkets will be a space to watch in terms of magazines over the rest of 2019.

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Newspaper front page cover-up

Mark Fletcher on May 11, 2019 3:22 PM

2019 has seen a significant increase in replacement of the entire front page of some newspapers in Australia with ads. What used to be a rare replacement of front page news with a full wrap-around is more common now in my experience. While we will never know, I’d love to know the impact on sales.

On Saturdays years ago, customers would empty the papers of their catalogues and flyers. I have seen customers recently remove the ad wraparound and leave it at the counter or, worse, throw it on the ground in the street.

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