I am questioned several times a week by potential newsagents and existing newsagents about the state of the retail channel and its future – at the individual business and channel-wide levels.
Last week I received an email I share here:
I got your contact details from the Australian Newsagency blog as I am looking at taking on a newsagency that recently closed and was wanting to get some information support to assist with my decision making process. I don’t have any previous newsagent experience but I have some retail experience and my background is accounting to a fairly senior level in corporates.
Everything I read indicates that newsagencies are a declining business but I was hoping to get access to information that would support my analysis and provide ideas to ensure that a business would have the best opportunity to be successful.
My correspondent asks common and good questions. Here is my response. I share it here to reflect publicly my thoughts on this.
Newsagency businesses can be excellent businesses or dogs of businesses. It all depends on what you make of it.
The traditional newsagency is dead there is no doubt about that. by traditional I mean a mix of low margin products, relying on others to drive traffic.
If you create a business that is fresh, offering what local shoppers want and with a retail feel that is relevant it will do well. The keys are to be in control and own the business as a retailer and not as an agent.
This is the future … newsagents stopping being agents and becoming retailers, best practice retailers in a tough, competitive but fascinating world of retail. These are our days to shine, to reinvent our businesses to become fresh and exciting, to the swatch of retail – they turned the dying watch business around and made it desirable and highly profitable.
So, are we dying? yes, the current old school model supported by some dinosaur operators. The new approach is thriving. I am seeing businesses with excellent growth. Those who complain the most about the current model and question the optimism of others will often be from the old school. Beware.
In taking on the new business, focus on traffic drivers, margin drivers and basket builders. These three combined are our future.
I’m happy to expand the discussion from here…
One of the challenges we have as a channel is how we talk about the channel – in our businesses, with family, with friends and to others we pass along the way. Too many talk the channel down. Too many who have exited or are about to exit complain.
The future of the channel is vital for those here today for the long haul and for those coming into it tomorrow. They (we) are the future. What we make of it is up to us.
In all of the challenges we face today are opportunities. I see many newsagencies doing very well. Yes, some are failing and doing poorly.
Overall, I’m optimistic.