Australian Newsagency Blog

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

Legacy newsagency suppliers are wrong: traffic from one successful product category does not always drive success for another product category

Mark Fletcher
December 22nd, 2020 · No Comments

Looking deeper at data from a bunch of regional newsagencies for November / December this year compared to last year, it is obvious that traffic from low-margin legacy products is not key to the health of a business.

In each case, local newspapers closed, slicing hundreds of transactions from each business each week. There was no negative financial impact. Transaction count was down, but not revenue.

Even though I have commented here for many years about the inefficiency of newspapers for retail newsagencies, plenty of newsagents are discovering it for themselves. The newspaper shopper is likely to purchase a newspaper and nothing else around 80% of the time – less so in regional Australia, far more so in capital city shopping centre newsagencies.

Plenty of local newspaper closures are not adversely affecting the performance of newsagencies.

For decades, newspaper publishers, and other low-margin legacy suppliers, said yes our products are low margin but they drive traffic and you make money from that.

No, most low-margin legacy products are inefficient for newsagents. They may sell in volume. however, rarely does that shopper purchase higher margin items. No, the new higher margin items newsagents source often drive net new traffic.

While the closure of local newspapers is disappointing for the reach of local news, retail newsagents can have a bright future regardless.

I get that retailers like foot traffic. The key, however, is that foot traffic has to be commercially valuable. Single item purchase of low margin product is not as commercially valuable as it once was.

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Category: newsagency of the future · Newspapers

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