Tag: Retail Traffic

How to decouple your newsagency: five jobs, two years, four numbers

All week we have made the case for decoupling. Today, the how. This is not a slogan and it is not a rebrand you order from a signwriter. It is five jobs, done in order, over about two years, and every one of them is within reach of every shop.

Job one: find the number that is not yours. Go through your last full year and add up the gross profit, not turnover, from lines where someone else sets the commission and can change the terms without asking you. Papers, magazines, lotteries, parcels, bill payments. That share of your total GP is your exposure. We recently reviewed a shop in a wealthy village doing nearly a million dollars, where 41 per cent of gross profit came from the lottery counter at ten cents in the dollar, and more than half was controlled by companies that do not know the owner’s name. For a traditional newsagency the number usually sits between half and three quarters. The work is driving it below a third. One afternoon with your POS data starts it.

Job two: make the floor tell the truth. For each zone of the shop, record the share of floor it takes and the gross profit it produces, then sort. In that same shop, a quarter of the floor produced five per cent of the GP, while one card wall out-earned all of it three times over per metre. Quit the dead categories, bank the cash and give the space to what earns. Put the papers at the back so the paper customer walks past everything you make money on.

Job three: create your own traffic. One transformed shop grew gifts to its biggest department and still saw customer counts fall seven per cent, because changing what you sell does not change why people come. Agency lines rented us our traffic for a century. Replacing them is weekly work: a real loyalty program, a window that changes monthly, small events, local product, social posts about what you unpacked this week.

Job four: change the word, fourth, not first, because a rebrand on an unchanged shop is wallpaper. New name, new sign, new Google category, told as a growth story while you are trading well. Check your lease first.

Job five: decouple the owner. Document the routines, give staff real departments, review the numbers monthly like a board. A business that runs without you is also a business someone will one day want to buy.

Then track four numbers monthly: customer transactions, the share of GP you control versus others, GP per square metre, and the basket. If transactions and your owned share of GP rise together, you are decoupling.

This is the work newsXpress exists to help members do. If you want help finding your numbers, talk to us.

Website: www.newsxpress.com.au | Find out more: help@newsxpress.com.au | CEO: Mark Fletcher: 0418 321 338

Lotteries and Australia Post were the newsagent’s safety net. Both are being pulled away at once.

Yesterday we set out the evidence that the traditional newsagency channel has less than ten years left. Today, the quiet money, because this is the part that should stop every newsagent cold.

For years the comforting theory was that even as print declined, lotteries and agency lines would cushion the fall. Look at what the lottery company is actually doing.

The Lottery Corporation restructured this year and now openly describes your counter as a place to sign customers up to digital play, not as the place the sale happens. Digital is already close to half of lottery turnover. And here is the number that matters. On their own figures, a digital sale earns them a margin of around twenty per cent. A sale through your counter earns them eight, because through your counter they pay you a commission. Every one per cent of turnover that shifts from your shop to their app is worth about $6 million a year to them. That is not a company drifting away from retail by accident.

Understand what is really lost when a lottery customer moves to auto-play on an app. The commission was always thin. The real value was the visit. The lottery counter brought someone in twice a week, and while they were there they bought a card, a pen, a bar of chocolate. Lose the visit and you lose every high margin impulse sale that rode along with it.

If you think a big partner would never squeeze a loyal retail network, look at the pubs. Tabcorp raised weekly fees and cut commissions on its betting terminals this month, and country publicans responded by ripping the terminals out. Same logic, same playbook. When digital economics favour it, the partner squeezes the counter. There is no reason to believe lottery retailers are exempt.

Australia Post, the other quiet earner, has a plan on the table to close post offices and reshape its agency network, and its prices rose again in July.

So the two income streams that were meant to carry newsagents across the print decline are being dismantled at the same time. The bridge is being pulled apart while we are standing on it.

There is a practical response to all of this: reduce, deliberately and quickly, the share of your profit that other companies control. Later this week we will show you exactly how to measure that number and drive it down.

Tomorrow: the comfortable answers, and why cheap and convenience are traps.

Website: www.newsxpress.com.au | Find out more: help@newsxpress.com.au | CEO: Mark Fletcher: 0418 321 338