How we achieved $388 in sales to one customer this morning in our suburban newsagency
This true story happened this morning at my Mount Waverley newsagency.
A new customer visited and made a modest gift purchase. On the receipt was a discount voucher for $4.00, which was pointed out to them.
They left the store and returned a few minutes later and made another purchase.
Then, twice more, they left the store and returned a few minutes later and made another purchase.
Over the course of four transactions they spent $388.00 for which we gave away around $30.00 in discounts, which is small when you consider the margin we achieve with gifts
The voucher guided them to look beyond their destination purchase.
here is a video I shot late last year in which I explain the vouchers some more. What happened today at Mount Waverley is not unusual. It’s another way we can grow our newsagency businesses.
This is a good example how a systematic approach to managing loyalty can. drive sales. There was nothing extra special about the approach in-syore. In reality, the software did the heavy lifting, calculating the discount opportunity and including this on the receipt.
It’s a thill seeing it work so well, work in different tilting the business.
In our Mount Waverley retail setting we compete with several gift shops. Plus, we have Chadstone less than 10 minutes away. Every win we can make is worth it to this small suburban retail newsagency.
While it was key we had products they wanted or were likely to want to purchase in the next few weeks, it was the practical opportunity of saving that mattered in making the $388.00 in sales a reality.
Any newsagent can do this.
While the Tower newsagency software was first newsagency software to offer discount vouchers back in 2013, others do now so newsagents with other software could have the type of success I have described here.
My point is – we all need to structure our businesses for these wins based on differentiation of our offers through smart loyalty marketing in businesses with broadly appealing gifts.
It’s good news and another example of small steps combining to create a good commercial outcome.
Whereas in the past we’d letterbox flyers and advertise in local papers. Today, using tech, we can guide greater efficiency from shoppers, maximising the opportunity.
A word of warning re $2 card spinners
Some card companies push $2 card spinners aggressively to newsagents, claiming excellent sales numbers.
My advice is ask for the evidence, ask for more than the anecdotes of sales people. Anecdotes are easy. Evidence does not lie.
Looking for data in one newsagency recently, a $2 card spinner generated 15% of greeting card GP whereas a smaller, less stock heavy, spinner generated 16% of greeting card GP. Considering the space and carry stock weight, the second spinner is the better investment for the business.
Sure, $2 cards give you a product with which you can compete with discount variety stores. To me, the big question is do I want to compete with discount variety stores? My answer to that is no … because if I do so, I set shopper expectations in a way that means selling gifts priced at $200 and more is challenging.
I get that sales reps are paid to sell. The thing is, that puts their needs ahead of yours. Data is key. In all the data I have seen from newsagencies for years, cheap card spinners, like $2 card spinners, do not serve newsagency businesses well. There are far better uses of floor space and inventory investment.
This all comes back to Blue Ocean Strategy. Swimming in the blue ocean is more enjoyable, healthier and valuable. Swimming in the red ocean is bloody. For me, $2 cards are a red ocean product.
Newsagency sales benchmark results: Oct – Dec 2020 versus Oct – Dec 2019
Based on sales data covering October through December 2020 and 2019 from 156 newsagency businesses across Australia in city and country locations, high street and mall, the latest newsagency sales benchmark study is revealing as to the impact of Covid on our channel and the value of location.
Revenue surge in Australian newsagency businesses during Covid.
Most too successful to qualify for JobKeeper as sales of some traditional and key new product categories surge.
- Gifts lead the revenue surge.
- Toys, games and jigsaws experience double digit growth.
- Magazine sales grow.
- Regional newspaper closures do not hurt business performance.
- Shopping centre newsagencies down, against the trend.
Let’s dive deeper into the results. This round of the benchmark I look at regional and city high street businesses. I have not broken out shopping centre businesses because the dataset is too small. The results from those stores for the quarter, however, are bleak. Revenue down between 15% and 20%. Steep declines in magazines and newspapers. While some categories, like gifts did okay, performance was nothing like on the high street.
Regional high street businesses.
- Transaction count change: down 1%.
- Revenue change: up 11%.
- Basket size change: up 15%.
- Newspaper unit sales: down 10%.
- Magazine unit sales: up 5%.
- Card revenue: up 7%.
- Stationery revenue: up 9%.
- Gift revenue: up 35%. 75% of businesses report selling gifts.
- Toy revenue: up 25%. 10% of businesses report selling toys.
- Puzzle revenue: up 35%. 20% of businesses report selling puzzles.
- Instant lottery revenue: up 16%.
- Lottery revenue: up 4%.
City high street newsagencies.
- Transaction count change: up 2%.
- Revenue change: up 7%.
- Basket size change: up 10%.
- Newspaper unit sales: down 8%.
- Magazine unit sales: up 2%.
- Card revenue: up 7%.
- Stationery revenue: up 6%.
- Gift revenue: up 20%.
- Toy revenue: up 15%.
- Puzzle revenue: up 18%.
- Instant lottery revenue: up 18%.
- Lottery revenue: up 3%.
The gift percentages above do not tell the full story. There are some newsagencies that achieved 200% growth off a reasonable base in 2019 of $25,000 in gift sales. Also, there are some newsagencies that booked $200,000+ in gift revenue for the quarter.
Within gifts, homewares are surging with some newsagencies booking more than $25,000 from this segment alone in the quarter. fashion, too, is surging with some recording more than $15,000 in revenue from a segment that the year before contributed $0.
In terms of cards, there are some newsagencies reporting 40% and more growth. This has usually come about through significant shop floor and supplier related adjustments.
Note.
These are averages. The gap between those doing well and those not doing well is considerable. It is important that newsagents look at their own data as the most important competitor they have is themselves. The trading period from the past against which you compare results is your competitor. Look at those numbers more carefully than you look at these benchmark results.
What have we learned from the last 3 months?
- There is much good news here.
- People prefer the high street over shopping malls.
- There is a feeling that the card shopper community has grown … more people are sending cards.
- The newsagency channel is healthy.
- The best growth is coming from categories over which newsagents have the most control – gifts, homewares, toys, games, puzzles, collectibles.
- Diversification in newsagency product offering is key to success.
- Having an online presence drives revenue growth.
- Postable gifts are selling well.
I am grateful to all newsagents who shared their data for inclusion in this study.
Mark Fletcher.
Email: mark@towersystems.com.au Website: www.towersystems.com.au Blog: www.newsagencyblog.com.au
M | 0418 321 338
Taking your newsagency online workshop today @ 2pm
Today at 2pm, I am hosting a free workshop for any newsagent interested in taking their newsagency business online.
This, itself, will be an online session, which you can access from anywhere with this link:
https://zoom.us/j/91031390280?pwd=LzFKYXFqdVJueS9iNWhNbWRJUndBUT09
Meeting ID: 910 3139 0280 Passcode: 323615
I won’t be trying to sell you anything in the session. Rather, I will share experience insights, lay out the steps involved, discuss online platform options and answer all questions.
Are newspaper promotions not as important as they used to be to some in circulation?
Back in the day when a promotion like the latest book offer from News Corp. was launched there would be advance information, including to software companies – so newsagents could land the offer in their business with the right data management processes to ensure efficiency and maximise the opportunity.
No more.
This book offer from News Corp. this past weekend, ahead of a price rise slipped in unannounced, leaving newsagents and newsagency software support people dusting off previous advice late. It was okay in that previous advice worked. That’s not the point though. Some newsagents, especially some new newsagents, were unnecessarily stressed because of poor comms from the publisher.
The weakened circulation management infrastructure in capital city newspaper publishing offices results in less support for offers like this and less engagement in newsagencies.
A very different Toy Fair this year
The folks organising the Toy Fair have, in my view, done a better job of dealing with Covid trade show challenges than reed and AGHA. They called it early and decided on a digital trade show, rather than leaving the decision to the last minute. back in November they made the decision and advised the marketplace.
Being digital, more newsagents can attend and engage with this vital category.
Here is a terrific video from them pitching the fair and explaining how it will work:
Great leadership on show from the board of the ATA.
Why we are likely to have fewer newsagencies in major shopping centres in Australia
Covid revealed a vulnerability of major shopping centres that attract crowds, a vulnerability that remains on show today, in February 2021.
Whereas shopper traffic in high street retail is at pre-Covid levels and, often, ahead, in shopping centres traffic remains flat in some and down in others.
Try and they might, major landlords are struggling to attract the numbers of pre-covid, and this is impacting retail, especially small business retail. this brings me to newsagency businesses.
More traditional newsagency businesses rely on the habit based shopper. A certain number of this type of shopper has found satisfaction elsewhere, outside of major centres.
I think this is a factor in some of the shopping centre newsagents I know looking for space outside. I am one of those.
With major landlords unwilling to reset occupancy cost – yes, they are pushing increases, not offering decreases – the value proposition considering the lower traffic is not there. Something will have to give from landlords if they want newsagencies to remain. However, I suspect they are not as interested in the newsagency channel.
There is appeal for kiosk based lottery outlets. However, with supermarkets covering basic magazines, cards, newspapers and stationery, our shingle is not the must-have it once was. I have no issue with that. My concern is for newsagents who feel they must be in a centre and end up agreeing to a higher occupancy cost.
Having traded pre and through Covid in high street and shopping centre situations, there is no doubt that for the medium-term, high street has a far greater appeal, because of the return that can be achieved through the control you have.
Workshop: taking your newsagency online
Tuesday next week, at 2pm, I am hosting a free workshop for any newsagent interested in taking their newsagency business online.
This, itself, will be an online session, which you can access from anywhere with this link:
https://zoom.us/j/91031390280?pwd=LzFKYXFqdVJueS9iNWhNbWRJUndBUT09
Meeting ID: 910 3139 0280 Passcode: 323615
I won’t be trying to sell you anything in the session. Rather, I will share experience insights, lay out the steps involved, discuss online platform options and answer all questions.
Being online is critical to every retail business. We saw that last year and already see value from that this year. Business experts, accountants, mentors … everyone agree that being online is critical.
The hope I have for this session is that it offers a useful learning opportunity for newsagents, to encourage them to get online and to lay out several pathways through which they can achieve this.
And, if the 2pm timing does not work, let me know and I will do my best to schedule another session at a time that suits.
News Corp. advises distribution newsagents of fee change
Newspaper home delivery in Australia continues to be a low-cost service with plenty of small business newspaper home delivery business owners effectively financially supporting ailing large newspaper publishers.
As I have noted here many times previously, when newspaper home delivery customers are surveyed about what they would pay for the service, the majority would be happy to pay more.
For a company that preaches free market from its platforms, it does not live it when dealing with small business newsagents.
Strong magazine numbers in some newsagencies in January
Check our this magazine sales data from a regional newsagency for January, reflecting excellent year on year growth in January 2021 over January 2020.
The numbers achieved by this business are typical for small town regional Australia. The growth is at the high end, reflecting an extraordinary result by the owners, who have tirelessly pursued new traffic opportunities to expand the relevance of their business.
Well done to them and to all newsagents who are achieving year on year growth numbers for magazines and their business overall.
There is plenty of good news in your channel.
More newsagents engaging in cashless debit card trial
The federal government’s cashless debit card project is reaching more communities. Small business retail newsagents have been part of the trial since the beginning. Indeed, they were among the first retailers to participate.
Facilities embedded in selected POS software platforms enable the acceptance of the federal government’s cashless debit card as a method of payment for a defined range of goods.
Including newsagents in the trial is important in that not including them could have encouraged shopping away from the channel.
While the cashless debit card is contentious in the community, it is here that alone is reason for newsagents to engage when presented the opportunity.
I became involved in the project around two years ago, when it kicked off, through the POS software company I own. The initial trial locations in Queensland paved the way for what is now a broader roll out of the trial.
I mention this project today because more newsagents are being contacted for participation. You can see from the invitation email that it is a government initiative, not spam as some wondered.
New pay rates for general retail award
Click here to download the up0dated general retail award as released by the Fair Work Ombudsman yesterday. The changes come into effect from the first full pay period on or after 1 February 2021. The new rates flow from June 2020, when the Fair Work Commission announced a 1.75% increase to minimum wages.
An important 2 weeks for newsagents
This week and next are vital for card sales in newsagencies with Valentine’s Day front and centre.
Valentine’s Day is either the second or third biggest card season in plenty of retail businesses.
Achieving sales success with Val depends on interesting products being on offer, displayed well and pitched out of store in clever ways.
Our out of store promotion needs to guid people who might not purchase a Valentine’s Day card to consider doing so. I think the best way to do this is through subtle and inspiring posts.
Posts that shine a light on products people don’t see as Valentine’s related work it drawing attention to the season of those who otherwise may let it pass by.
The photo I have shared in this post is one of the Valentine’s Day gift displays in one of my stores. You can see a varied range of gifts, non traditional gifts for this season.
newsXpress has gone with the love day branding to play away from Valentine’s Day that most will use. This is because the day has evolved. I think it is important that we evolve the appeal of this and other seasons.
I encourage newsagents to make the most of the next two weeks, to play outside of what is traditional, to try and broaden the appeal of what is a key season in our businesses.
Perth newsagents can be open during snap lockdown
The 5-day Covid lockdown announced late yesterday by the Western Australian government does not require newsagents to close based on information released by the government.
While newsagencies can remain open, advice on safe retail followed in Victoria and New South Wales recently is recommended:
- Have hand sanitiser at the entrance to the shop and at the counter.
- Have all customer facing staff in masks.
- Acrylic screens at the counter are a big help.
- If you can trade outdoors at all, do so we know outside is safer.
- Check your in-store communication re social distancing.
- Maintain good cleaning practices using anti-bacterial wipes.
- Remind everyone working in the shop about hand washing.
- If you serve in an area where English is not a dominant first language, consider using the resources at this SBS for Covid information in many different languages are excellent.
- Consider this social media post: With Covid challenging again, it is important that we maintain a safe and healthy distance, wash our hands regularly, use hand sanitiser and stay home if we feel unwell or have any Covid symptom. here at the shop, we offer hand sanitiser, clean regularly and enforce social distancing. Let’s squash this thing, again.
Retail businesses like newsagencies are front line businesses. The safer you make it for your shoppers and the calmer your messaging the better you will trade through this.
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