Tower Systems publishes newsagency sales benchmark results

Core categories in retail newsagencies challenged while specialty categories grow.

This newsagency sales benchmark study reflects sales results as tracked in 149 retail newsagency businesses in Australia for the January through March quarter of 2018 compared to the same period in 2017.

Tower Systems undertakes the survey each quarter on a pro-bono basis in support of small businesses newsagency businesses across Australia. We are grateful to newsagents and their suppliers for their interest and to others who trust the survey results.

Only businesses with accurate data are included in the study.

With under 3,000 businesses in this channel, the number of participants is considered as a good indicator of overall channel performance. In collating data, I have removed businesses at the extremes where other factors are at play such as major construction shutting a street or a newsagency in a centre with two newsagencies where one closed and thereby giving an unnatural boost to the other.

Each data point is the average, mean, of all data for the data point.

In collating results, I have only included data for each category businesses trading in that category.

OVERALL BUSINESS PERFORMANCE METRICS.

  • Customer traffic. Down 3%
  • Overall sales. Down 4%
  • Basket depth. Flat.
  • Basket dollar value. Flat.

CORE PRODUCTS.

  • Newspapers. Unit sales. Down 9.3%.
  • Magazines. Unit sales. Down 8.8%.
  • Greeting cards. Revenue. Down 2.7%.
  • Stationery. Revenue. Down 7.6%
  • Lotteries. Revenue. Flat.
  • Tobacco. Revenue. Down 16%.
  • Agency. Parcels, gift cards, betting account top-up. Down 6%.

SPECIALTY PRODUCTS.

  • Gifts. Revenue. Up 2%.
  • Toys. Revenue. Up 9.2%.
  • Plush. Revenue. Up 3.1%.
  • Collectibles. Revenue. Up 2.4%.
  • Craft. Revenue. Up 3.1%.
  • Coffee. Revenue. Up 11%.

What does this mean?

These core products numbers reflect continuing challenges in the core for newsagency businesses. This is not news given the benchmark results for years now.

In my opinion, the decline in newspapers, and magazines to a lesser extent, impacts the results for other products in the core such as stationery and cards. If this is true, it reinforces the importance of having other traffic drivers in a retail business, giving shoppers other compelling reasons to visit.

The occupancy cost challenge – a note for landlords.

Landlords want newsagency businesses in their retail mix. They want the store with papers, magazines, lotteries and other core items for the channel. Often, they restrict the space available for non-core, imposing a low gross profit model on businesses, thereby increasing occupancy cost.

Newsagencies today cannot sustain occupancy costs of more than 15%. The goal must be 11% for the business to be profitable and able to serve the usual level of debt needed for such a business.

Landlords need to be aware of the changes in product mix, the challenges of low-margin core products and restrictions they place on what businesses can sell. They need to be flexible on rent so newsagency businesses can be sustained and thereby provide the service they want in their centre.

If landlords want a newsagency business they need to price the space to reflect the nature of a sustainable business in that location rather than any premium rent they could get from a retailer with higher margins.

Labour cost – dealing with the challenge and opportunity.

Labour cost for an average newsagency sits at 16% of revenue where revenue is product revenue plus agency commission.

On a pure benchmark analysis, this is too high. However, the right labour invested in the right location in-store generates a good return. For example, a skilled person working the shop floor in high margin product categories can deliver valuable benefits whereas the right person working newspapers or magazines is less valuable.

When it comes to labour investment and management the core focus must be on customer-facing. That means having the maximum labour time possible situated to be accessible to customers. You do this by shifting to the shop floor as much work as possible – pricing, returns etc.

Newsagents need to manage their roster carefully and manage employee hours to be customer facing focused and engaged on a shared goal of driving revenue from each customer visit. Sharing information with employees is key to achieving this.

The specialty opportunity.

It is easy to say to newsagents get into one or more of the specialty areas. There are suppliers who will pitch products in these areas. The challenge is how you drive success. Getting the right product is part of the story. Visual merchandising, employee training, shop floor engagement and out of store marketing are all important factors. These all require relentless focus. Putting a category of products on the shelves is not sufficient.

Specialty products are rapidly evolving, presenting more opportunities over time. Keeping yourself informed of the opportunities, especially ahead of any wave, is key.

Tower Systems serves more than 1,700 newsagents with awesome newsagency software.

Mark Fletcher.
Email: mark@towersystems.com.au  Website: www.towersystems.com.au  Blog: www.newsagencyblog.com.au
M | 0418 321 338

Help for POS Solutions newsagency software users

Tower Systems has been quietly helping more users of the POS Solutions newsagency software switch to Tower Systems newsagency software.

What we have learned from the many hundreds who have switched already have blazed the path for others.

We help people switch with personal and timely support access, one on one training, data conversion and more. As the company serving in excess of 1,700 newsagency businesses we have the critical mass to serve newsagents keen for then Tower Systems experience.

As the newsagency channel undergoes extraordinary change, Tower Systems remains a constant support through its best-practice newsagency management software, newsagent support and newsagent marketing help.

Size matters. Tower Systems serves more newsagents than all other software companies combined.

Tower newsagency software customers receive:

  1. The latest Tower Systems newsagency software.
  2. On-site installation and training.
  3. Data conversion, converting as much data as we can access.
  4. Software support for the first three years.
  5. Software updates for the first three years.
  6. Unlimited over the phone follow up training for the first three years.
  7. Access to an online knowledge base with hundreds of articles and advice on the software, which you can easily search 24/7.
  8. Access to weekly group live online training workshops.
  9. Access to a private Facebook page where you can discuss on any topic.

More broadly, we are well resourced to help newsagents navigate change.

  1. Tower Systems will not leave the newsagency channel.
  2. We will fight for you. Beyond our software, outside of support, we will help with supplier issues, business strategy and other challenges you confront.
  3. Our software continues to evolve. We release two to three major updates each year. You choose when to load them. Each update is thoroughly tested in a comprehensive beta program.
  4. We own newsagencies. Yes, we walk in your shoes.
  5. No locked-in support fee. Taking up support coverage once the three-year period ends is optional.
  6. Lower support costs. Also, transparent. No mates’ rates for a select few.
  7. Fast support. Most calls are handled when you call. If not, we call back.
  8. At any time, you can see live how many help desk calls we are working on and how many we have closed that day.
  9. Support escalation. We have a structured escalation process should you be unhappy with a support call.
  10. Easy management access. The leadership team of Tower Systems is available to you. We take customer service seriously and personally.
  11. Updates when you want. You are in control of when you load updates.
  12. You are listened to. We offer the only transparent, user driven, software enhancement suggestion service. All our customers are listened to.
  13. Free training. Long after you install our software you have access to free personal training to refresh knowledge or cover new facilities.
  14. More integrations. Our direct links to Xero, Magento, Shopify and more mean you have more direct link options to help you grow your business.
  15. Business management insights. We can look at your business performance data and provide a personal analysis of what we see
  16. Owner access. Call Tower owner, Mark Fletcher, on 0418 321 338 or email mark@towersystems.com.au.

POS software connected websites help small business retailers leverage high street and online

Tower Systems specialises in developing and supporting POS software for specialty retailers in selected  retail channels as well as developing and supporting POS software connected websites for these businesses.

We with with these retailers: giftsjewellersbikestoysfishing/outdoorsgarden centrespet shopsproducefirearms, adult shops and newsagents.

Our Magento websites are best practice, bringing the latest e-commerce facilities to high street retail, enabling these retailers to connect with shoppers anywhere in the world.

The benefits of a POS software connected website are considerable:

  1. Accurate stock on hand data for the website.
  2. Time saved in managing inventory and sales data.
  3. Fewer mistakes thanks to the elimination of double handling of business data.
  4. Easy management of inventory data with only one entry point of data – the POS software – feeding the website automatically, efficiently and accurately.
  5. Easy tagging on and off of what you sell online.
  6. Fast photo upload.
  7. Whole of business management.
  8. Easy management of click and collect.

Managing the physical and online outlets through a linked and integrated platform is good business. It is also good for the customer.

Thanks to a skilled web development team and a skilled POS software team, Tower Systems is able to offer a whole of business solution from within the one company, not using any external resources. We bring to the table focus, consistency and a track record of success in POS software as well as retail business websites.

Working with small business retailers across a variety of channels has exposed us to experiences that have been invaluable in developing our skill set.

Working on developing websites for our own retail businesses makes this personal for us. We can take you deep into our own experiences of POS software integrated websites, showing not only the how but also the why and when. Thanks to our own personal experience we can provide context and this is a differentiating factor for us.

We can talk about going from start-up to half a million dollars in online sales in a year: the impact on the high street, the back end processes necessary for fulfilment, the financial side as well as how we got the level of exposure necessary to drive the sales we achieved.

If you want to grow online sales, talk with us. We can talk about web development as well as business management and marketing necessary to achieve this. We start with a business to business discussion as getting that right is vital to the tech delivering the benefits you want.

You will find us open about the experience. We take education seriously and will happily share what we know.

The best newsagency software in Australia

It is easy to claim that you offer the best newsagency software in Australia. The challenge is to prove it.

For Tower Systems, the proof is in the numbers. More newsagents have chosen the Tower software than any other. Around three times more.

With close to 1,800 newsagent customers and around 3,200 newsagency businesses in the channel and six other newsagency software companies and the knowledge of the Tower newsagency customer base at close to 1,800, the numbers are compelling.

We are grateful to Australian newsagents for their support.

More newsagents switch to the Tower Systems software

In 2017 Tower Systems switched more users from other newsagency software to its best-practice newsagency software.

Serving in excess of 1,750 newsagents in a retail channel of 3,400 newsagency businesses, Tower Systems is proud of its national base and commitment and appreciates the support of small business newsagents.

Newsagents tell us they switch to Tower Systems for:

  1. Easy access to professional support.
  2. Terrific newsagency-specific software.
  3. Business growth advice and encouragement.
  4. The ability to choose when to date the software.
  5. Optional support fees.
  6. Strategic guidance.

Newsagents large and small, city and country, shopping centre and high street … they are all welcome at the Tower Systems newsagency community. We work hard to help newsagents enjoy their businesses more, every day, in many different ways.

This is our mission. Well, part of our mission … as serve a range of retail business channels with specialty software.

Is the Tower Systems software the best newsagency software? Only those with experience using different software packages can say. What we do know, however, is that we are the only newsagency software company that runs newsagency businesses. We walk in your shoes, every day.

Helping Australian newsagents grow their businesses

Ideas for transforming your newsagency in 2018.

A free management workshop for newsagents.

newsXpress invites newsagents from across Australia to free management workshops. We also offer to fund air travel for newsagents to ensure easy access to this important event.

Hear how newsagents are transforming their businesses, finding new customers, enjoying a new lease on life. We will share case studies from city and country newsagencies.

  1. See new, exclusive, product that is attracting new shoppers, product you have never seen at a gift fair or trade show before.
  2. See greeting cards not available in any other newsagency, greeting cards that appeal to shoppers beyond the usual caption range in Australia.
  3. See the evidence of success of the newsXpress multi-site web strategy that is driving online as well as in-store sales. We will share the latest sales data.
  4. See the newsXpress P&L – demonstrating transparency.

Here are the only dates in this series. Please tick your selection.

  • ADELAIDE: 5th Feb, 10am @ Rydges South Park, 1 South Terrace SA 5000
  • SYDNEY: 6th Feb, 10am @ Hilton Sydney, 448 George St Sydney NSW 2000
  • BRISBANE: 7th Feb, 10am @ Brisbane Riverview Hotel, Kingsford Smith Dr,
  • PERTH: 8th Feb, 10am @ Parmelia Hilton Perth, 14 Miller St Perth WA 6000
  • MELBOURNE: 9th Feb, 10am @ Grace Park Hawthorn Club, 6 Hilda Crescent

I am posting this here as I am a director of newsXpress and will be hosting each workshop.

Book by emailing help@newsxpress.com.au or by using the booking form.

If you have any questions, call me – 0418 321 338.

Tower Systems is proud to be affiliated with newsXpress.

How Tower Systems helps small business newsagents beyond newsagency software

Tower Systems serves in excess of 1,700 newsagents with newsagency software. Years ago, in another place online, our CEO provides practical advice to newsagents on how to do a magazine relay to increase sales.  Some months ago, that advice was updated.

Here is the post, outlining how small business newsagents today can build stronger better businesses through a magazine relay:

In the years since I published How to do a magazine relay in your newsagencyplenty has changed. In this post I provide up to date advice.

Before you start the relay, consider the amount of space you want to allocate to magazines. Do not allocate space to fit what you are sent. Allocate space to make money.

Today, magazines are best located on a wall, ideally at the rear of the shop, such that can be seen from people walking past the shop. A simple MAGAZINES sign above works well.

This back of shop placement, with magazines owning the space can work well as a traffic driver. Where I have seen this move implemented it has not increased the decline in magazine sales.

Ideally you can fit all magazines on the back wall and eliminate all aisle use of magazines.

On to the relay.

The relay you do in your business is your relay. There is no right or wrong way. What I have written here is my opinion, which may be wrong for you.

There is also no end point to a relay. What you do today will need refining next week and the week after. So, do not over think what you want to do as that would be a waste of time.

The goal of the relay has to be to disrupt magazine traffic in pursuit of an increase in sales. What I mean is: change everything, upset customers and staff, sell more magazines as people discover titles they did not know you had.

PLANNING

Map out the wall, determine your zones shopper: garden, food, men, women, sports etc.  The categories where I use less than one pocket per title are: special interest, British weeklies, food, comics and some craft segments.

Look at the percentage of sales delivered by each magazine category and look at sales trends for the categories.  Tote up broad groups. For example the percentage of sales for women’s weeklies, women’s interests, crafts & hobbies, crosswords, home & lifestyle and food & wine.  If your newsagency is like mine, this grouping will account for more than 50% of your magazine sales.

NOW, THE MAGAZINE RELAY

I suggest it is done by one person, an owner, working alone.

  1. Take every magazine off the shelves. That’s right. Don’t be precious as a jumbled pile gets you looking at the titles and categories differently. Take down all your magazines and all your posters.
  2. Clean the shelves.
  3. Start at the centre of the wall and build out. Build the women’s zone. I place this at the heart of magazines, so shoppers see it easily. I suggest you start here as it is the core from which all else flows.
  4. Place a half or full column of crossword titles next to weeklies.
  5. Next to weeklies place, in order, pockets of Better Homes and Gardens followed by Australian Women’s Weekly, British women’s magazines (yes, all of them), country living titles, home and living titles, food, wedding with a waterfall of the major title and hair.  For me, space wise, that sees out one side of the aisle.
  6. Then, I have fashion young, fashion older and I end this with a waterfall of Frankie.  Next is women’s health starting with younger target titles and blending to older ones. Next is pregnancy and baby followed by crosswords. This usually rounds out that side.
  7. Create sections, where the titles demonstrate clear zoning. But don’t be generous on space allocation as space costs money.

What I do in women’s is the same for the other zones I create.  I do each zone separately and try and get into the head space of the shopper of the zone – using the most popular titles to act as beacons, or signposts, for the zone.

I am careful what I place next to top selling titles. This is a prime spot, next to the popular titles. Choose wisely. Choose titles that naturally fit next to the big titles, titles shoppers are likely to browse and purchase on impulse.

If I am not sure about where to put a title I put it aside and move on.

I take extra time with special interest and hobby titles.  For example, I put railways and model railroad titles near each other but I am careful to ensure that they are separated as they appeal to two shoppers and only occasionally do you see titles from both segments in the same basket.

Within the zones I look for and respect specialisation. For example, within men’s lifestyle and sports I create a clean space for the quality serious fitness titles like Coach, Men’s Health and Men’s Fitness.

REVIEW, FEEDBACK, FOLLOW UP

You’re not done when you think you are done. Track sales, listen to your team and your customers. Tweak where you feel it is necessary.

Bring new issues to the fore. Continue to be engaged in how your magazine department looks.

Continue to look at your sales data.  If there is no lift be open to further change.

FINAL WORDS

Doing a magazine relay can be like doing one of those kid’s puzzles – you move them around and around until you have the completed image. That image can look and feel like a work of art once you are done.

While some readying this will be tempted to say why bother, we only make 25%. Get the relay right and sales will increase without any extra capital investment and with a lower retail space allocation. That is a win in my view.

If you have made it this far, thanks for reading.  Magazines really are a point of difference which we need to work harder at embracing – despite the challenges of the distribution system.

I’d be happy to answer questions or discuss magazine relays with anyone: mark@towersystems.com.au or 0418 321 338.

Over to you…

Tower Systems newsagency software Q&A

We recently engaged in a Q&A on our newsagency software, exploring some of the features that make this the most widely used newsagency software in Australia. Tower Systems is grateful to serve in excess of 1,700 newsagents, more than all competitors combined.

Here is part of the Q&A:

What are the most significant benefits of the system?

In addition to newsagency management specific facilities, using this software you can expect to reduce the cost of dead stock, improve traffic flow at the counter, spend less time agonising over decisions and enjoy the benefits of selling more.

Like any business tool, the benefits you get from using our newsagency business software reflect what you put in. There is no limit on how much training you can get from us.

Tower Systems approaches the opportunity as a long-term relationship.

Can I help local charities and community groups raise funds?

Yes, easily. You can track purchases by people supporting those groups and offer a rebate of your choosing to groups that support your business.

Can I ensure I do not sell to underage shoppers?

Yes, you can have a prompt come up on the screen to check that a customer is age-appropriate.

Can I offer buy now pay later like Afterpay?

Yes, easily.

Can I offer click and collect for online shoppers?

Yes, easily.

I have multiple loyalty offers for different categories, can I handle this?

Yes, easily. We have businesses managing a discount for shoppers who purchase 10 of one category, eight of another category and more where each offer is managed easily from the software. A single customer can engage with multiple loyalty offers. Plus, we track what customers buy so you can leverage this data.

Can I handle customer magazine putaways?

Yes, easily.

Can I take payment for newspaper subscriptions?

Yes, easily.

Can I do magazine returns electronically?

Yes, easily.

Can I handle a bundled price like buy 2 get 1 free?

Yes, easily.

Can I give manage newspaper home deliveries?

Yes, easily.

Can I take steps to manage / reduce employee theft?

Yes.

Is there management only control and access for seeing what people do?

Yes.

Can I create a roster?

Yes.

My business is changing and I want to sell café type products?

This is easy.

Will this software help me evolve my newsagency business?

Yes, easily. The software is web connected, to Shopify, Magento and WooCommerce. These connections help you engage online, attracting shoppers who would not walk in front of your shop.

Can I give loyal customers better prices?

Yes, easily.

Can I track sales to a particular customer?

Yes, easily.

Can I market to customers based on their purchase history?

Yes, easily.

Can I sell items by colour, size and style?

Yes, easily. This means you can sell fashion items if you want to get into a new area.

Can I sell bundled items like a gift pack I put together?

Yes, this is easy. You can have a bundled price as well as single prices for each if you wish. Creating bundles is easy as is retreating from bundles back to single items, maintaining the integrity of stock on hand data at all steps along the way.

Can I unbundle items from a pack back to single items?

Yes, easily.

Can I sell items by weight?

Yes, easily. We see this work well in newsagencies where they sell fudge and other items by weight.

Can I sell gift cards?

Yes, easily. You can sell gift cards for other businesses as well as your own branded, made just for you, gift cards.

Can I easily handle LayBys in the software?

Yes, you can establish your own rules and have these managed through the software.

Can I share useful local information on receipts?

Yes, this is easily setup and changed.

Can I handle special orders where a customer orders something I do not currently have in stock?

Yes.

The best POS software for Australian newsagents

We are grateful for the support of Australian newsagents as they continue to vote with their feet and money that Tower Systems offers the best software for Australian newsagents.

We make the claim on the basis of market share, customer retention and feedback from people who have joined our community from elsewhere.

As the newsagency channel undergoes extraordinary change, Tower Systems remains a constant support through its best-practice newsagency management software, newsagent support and newsagent marketing help.

Size matters. Tower Systems serves more newsagents than all other software companies combined.

Switching is not expensive. If you have current hardware, the cost can be low and paid over three years after which there is no mandatory cost.

Included in the low cost is:

  1. The latest Tower Systems newsagency software.
  2. On site installation and training.
  3. Data conversion, converting as much data as we can access.
  4. Software support for the first three years.
  5. Software updates for the first three years.
  6. Unlimited over the phone follow up training for the first three years.
  7. Access to an online knowledge base with hundreds of articles and advice on the software, which you can easily search 24/7.
  8. Access to weekly group live online training workshops.
  9. Access to a private Facebook page where you can discuss on any topic.

Tower Systems is well resourced to help newsagents navigate change.

  1. Tower Systems will not leave the newsagency channel.
  2. We will fight for you. Beyond our software, outside of support, we will help with supplier issues, business strategy and other challenges you confront.
  3. Our software continues to evolve. We release two to three major updates each year. You choose when to load them. Each update is thoroughly tested in a comprehensive beta program.
  4. We own newsagencies. Yes, we walk in your shoes.
  5. No locked-in support fee. Taking up support coverage once the three-year period ends is optional.
  6. Lower support costs. Also, transparent. No mates’ rates for a select few.
  7. Fast support. Most calls are handled when you call. If not, we call back.
  8. At any time, you can see live how many help desk calls we are working on and how many we have closed that day.
  9. Support escalation. We have a structured escalation process should you be unhappy with a support call.
  10. Easy management access. The leadership team of Tower Systems is available to you. We take customer service seriously and personally.
  11. Updates when you You are in control of when you load updates.
  12. You are listened to. We offer the only transparent, user driven, software enhancement suggestion service. All our customers are listened to.
  13. Free training. Long after you install our software you have access to free personal training to refresh knowledge or cover new facilities.
  14. More integrations. Our direct links to Xero, Magento, Shopify and more mean you have more direct link options to help you grow your business.
  15. Business management insights. We can look at your business performance data and provide a personal analysis of what we see
  16. Owner access. Call Tower owner, Mark Fletcher, on 0418 321 338 or email mark@towersystems.com.au.

Australian newsagency sales performance benchmark study results

For fifteen years, Tower Systems has published quarterly sales performance benchmark results based on accurate data from a broad cross-section of retail newsagency businesses.

This study is the most comprehensive even for the newsagency channel. Here is the latest report, for the April – June quarter of 2017 compares to 2016 on a same store basis.

The April – June quarter was tough for core products sold through the newsagency channel. In addition to the continuing decline in print media sales, this quarter’s benchmark results reveal a troubling downturn in lottery revenue as well as card revenue.

Here are the headline numbers by key product category:

  1. Magazine unit sales declined 11%.
  2. Greeting card revenue declined 4%.
  3. Lottery revenue declines 4%.
  4. Newspaper unit sales declined 12%.
  5. Gift revenue increased by 11%.
  6. Toy revenue increased by 16%.
  7. Stationery revenue declined 8%.

These are not good headline numbers. The bottom is falling out of the historic core of the newsagency channel. This will not be news to many as it continues a trend we have seen in this benchmark study for several years.

The above percentages reflect the overall performance of the 181 newsagency businesses in this benchmark study. It includes stores from a range of banner groups as well as independents. There are large businesses and small. Some are in shopping centres while others are on then high street. The cross-section is broad.

What is concerning is the pace of decline, especially with magazines as the decline had slowed recently. Looking more closely at the data, the decline is in the volume categories. Fringe categories such as special interest titles are doing well. Indeed, some segments show terrific growth.

Newsagents need to manage the overhead cost of newspapers and magazines. Labour, space and capital investment needs to be kept in line with the gross profit contribution of these categories. Busy work relating to newspapers and magazines should be eliminated.

The decline in greeting card revenue is a surprise. The reported percentage of decline, 4%, does not read well. However, like all the above data points, it is an average from the entire data pool. There are stores experiencing decline above 20% with others reporting growth above 20%. There is a clear correlation between stores with strong gift sales and card performance – in this case card revenue is stronger.

GOOD NEWS.

The good news is the performance of businesses playing outside the traditional space. For example, the newsagency with $25,000 in toy revenue in the quarter, reflecting growth of 18% or the newsagency with $45,000 in gift revenue and year on year growth of 22% of the newsagency with card revenue of $47,000 and year on year growth of 22%.

There are many good news stories in the latest study results. However, the good news will be overshadowed by the performance of the majority. It is challenging, some days, to know what to do or say to cut through with newsagents who are not engaged.

Too many newsagents think growth will come from categories close to what they have done historically. For example, too many get into cheap social stationery thinking that is competitive with Kikki.K or Typo.

My experience is the best growth comes from turning away from traditional lines and traditional suppliers and going with products and price points you would never have considered for a newsagency business. I see this approach working well in the benchmark results in businesses of different sizes and in different situations.

OVERALL PERFORMANCE DATA.

  1. Customer traffic. 78% of newsagents report average decline of 5%.
  2. Overall sales. 53% reported an average revenue decline of 3%.
  3. Basket depth. 61% report a 2% decrease in basket size.
  4. Basket dollar value. 63% report a decrease in basket value of 3%.

It is in the overall business gross profit numbers where the differences in businesses can be seen. 62% sit in the traditional newsagency GP performance band of 28% – 30%. 7% sit below 28%. 20% sit in the GP band of 30% and 35%. 7% sit between 35% and 40%. The rest, 4%, have a GP of more than 40%.

GP is a function of what you stock and the type of shoppers you attract to the business. Buying is where it starts.

WHAT IS DRIVING THE DECLINES?

Close to 80% of the businesses in the benchmark reported a decline in traffic with the average decline set at 5%. However, just over half reported a decline in revenue. This is because plenty are selling higher priced items, usually gifts. This softens the blow of the decline in legacy products.

I think the traffic decline is being driven by a decline in interest in legacy products on which traditional newsagency businesses have relied. I have said for years it is crucial newsagents have a strategy to drive net new traffic. Relying on legacy product to sell new products is not a plan. You need to source new products and to use these to attract people to your business who would otherwise not have shopped with you.

HOW TO RESPOND TO TRAFFIC DECLINES?

Any newsagency business can be successful, regardless of location and situation. This is truer today than at any time in the past thanks to what we can see being achieved online – not only in newsagency businesses but through other retail channels.

The key to success is to not run the business as a newsagency. That’s is, to not obsess about legacy products. Focus on new traffic products. Focus on price points you would usually say would never work in your business. Buy products you think will never work. Be radical and through discover what is possible in your business.

I urge you to ask yourself daily, what have I done today to reach a new shopper, someone who does not know we exist? This is what successful businesses in the benchmark study are doing and doing well.

DOES THE NEWSAGENCY CHANNEL HAVE A FUTURE?

I ask this every quarter. My answer remains – Yes! Absolutely. If you are prepared to shrug off what has been traditional for a newsagency business, stop hoarding, embrace change and embrace social media – you can have a bright future. The transformation from traditional to the new world must be urgent and dramatic.

AGENCY IS OVER.

My opinion remains – there is no upside in any agency parts of the business. People saying they are proud to be called a newsagent are entitled to their view. History will show that era is behind us.

OPTIMISTIC.

I am optimistic for my own newsagency businesses and for the businesses of many newsagents. Indeed, I have opened a new outlet the last few months. It does not look or feel like a newsagency. The numbers are terrific.

WHY I DO THIS STUDY

My interest in the study is as a newsagent and as a supplier to the channel through Tower Systems and through newsXpress. I want the channel to grow for selfish reasons and because it has been my life since 1981. I am invested.

BENCHMARK GOALS.

I am often asked for benchmark goals newsagents ought to aim for. Here are some benchmarks I have developed in my work with newsXpress and through Tower Systems:

  1. Gross profit: this is the goal gross profit for all product sales not taking into account any revenue or costs related to any agency business. The traditional newsagency average sits at 28% to 32%. For a newsagency focused on the future, the goal has to be at least 45%.
  2. Ratio of Gift revenue to Card revenue: 50% minimum. The goal ought to be 100% or more. If you do $100K a year in cards, target to do $100K in gifts, or more.
  3. Revenue per employee – $250 an hour minimum not including agency revenue. This is a contentious KPI. If you think it is not for you, work the numbers back and see what your number needs to be based on each labour hour in the business.
  4. Revenue PSQM $4,500 – $8,500 depending on country vs. city / high street to shopping centre and depending of product mix. Higher GP lower revenue required.
  5. Overall revenue mix percentage targets: Cards: 25%; Gifts/toys/plush: 25%; Stat: 10%; magazines/newspapers: 20%; other: 15%.
  6. FLOORSPACE ALLOCATION: Cards: 25%; Gifts/toys/plush: 25%; Stat: 8%; magazines/newspapers: 15%; other products: 15%; office/back room / counter: 12%. It’s rare you make money from an office or store room.
  7. Mark-up goals: Stationery: 125%; Gifts 110%; plush: 110%.
  8. Occupancy cost: between 9% and 11% of revenue where revenue is product revenue plus commission from agency lines. Location and situation are a big factor in this benchmark. For example, a large shopping centre business will have a higher cost than a high street situation.
  9. Labour cost: between 9% and 11% of revenue where revenue is product revenue plus commission from agency lines. Labour cost should include fair market costs for all who work in the business. (See above).

Mark Fletcher.
Email: mark@towersystems.com.au  Website: www.towersystems.com.au  Blog: www.newsagencyblog.com.au
M | 0418 321 338

Footnote: I founded Tower Systems in 1981. That company now serves in excess of 1,750 newsagents as customers with its newsagency software. In 2005, I joined newsXpress. That newsagency marketing group now serves 243 retail businesses with a traffic and revenue growth strategy.

Another twenty one newsagents switch to Tower Systems

Another twenty one newsagents have switched from other newsagency software to the Tower Systems newsagency software. This is on top of newsagents installing our newsagency software where they did not have a newsagency system in place.

Many hundreds of newsagents have switched to Tower Systems as they have seen our software bring new opportunities in new revenue and new traffic areas that are valuable to evolving newsagency businesses.

Serving close to 1,800 newsagents, Tower Systems serves more newsagents with its software than all other newsagency software companies combined.

We are grateful for the support of our customers. This means the world to us, to all who work here, and to the broader Tower Systems newsagent community.

In the latest update of our newsagency software we have enhanced facilities that enable newsagents to grow their businesses. This is good news. We back the software with practical help and advice, helping newsagents engage with their businesses in more valuable ways.

While we continue to support legacy category requirements, it is in new revenue stream areas that newsagents love what we do the most.

Welcoming more newsagents to the Tower Systems community

We are kicking some terrific goals with the Tower Systems software for newsagents with strong sales to businesses switching to our software.

While newsagents love the newsagency specific facilities in the software, it is the optional software support fee that attracts people. Newsagents can use our software regardless of whether they pay a support fee or not. This use includes being able to use XchangeIT for magazine returns – at no locked-in annual cost from Tower.

Our latest software update enhances the facilities for newsagents even further. The feedback from our customers about the update is inspiring. We are grateful for their support, and inspiration.

Why newsagents switch to Tower Systems newsagency software

As the newsagency channel undergoes extraordinary change in 2017, Tower Systems remains a constant support through its best-practice newsagency management software, newsagent support and newsagent marketing help.

With more than 1,800 newsagent customers, Tower Systems serves more newsagents than all other software companies combined.

Switching is not expensive. If you have current hardware, the cost can be as low as $2,200 a year for three years after which there is no mandatory cost.

Included in the low cost is:

  1. The Tower Systems newsagency software.
  2. On site installation and training.
  3. Data conversion, converting as much data from your current system that we can access.
  4. Software support for the first three years.
  5. Software updates for the first three years.
  6. Unlimited over the phone follow up training for the first three years.
  7. Access to an online knowledge base with articles and advice on the software.
  8. Access to weekly group line online training workshops.

Alternatively, you can pay up front and not pay anything for three years.

We offer this in response to the consolidation occurring in the newsagency channel. It is our opinion that not all current newsagency software companies will remain in the channel.

As the largest we are well resourced to help you navigate change not only in your software but in your business too.

  1. Tower Systems will not leave the newsagency channel.
  2. We will fight for you. Beyond our software, outside of support, we will help with supplier issues, business strategy and other challenges you confront.
  3. Our software continues to evolve. We release two to three major updates each you. You choose when to load them. Each update is thoroughly tested in a comprehensive beta program.
  4. We own newsagencies. Yes, we walk in your shoes.
  5. No locked-in support fee. Taking support coverage once the three year period ends is optional.
  6. Lower support costs. Also, transparent. No mates rates for a select few.
  7. Fast support. Most calls are handled when you call. If not, we call back fast.
  8. Easy management access. The leadership team of Tower Systems is available if you need them. We take customer service seriously and personally.
  9. Updates when you choose. You are in control of when you load updates.
  10. You are listened to. We offer the only transparent, user driven, software enhancement suggestion service. All our customers are listened to.
  11. Free training. Long after you install our software you have access to free personal training to refresh knowledge or provide training on new facilities.
  12. More integrations. Our direct links to Xero, Magento, Shopify and more mean you have more direct link options to help you grow your business.
  13. Business management insights. We can look at your business performance data and provide a personal analysis of what we see
  14. Owner access. Our owner, Mark Fletcher, is easily accessible: 0418 321 338 or by email on mark@towersystems.com.au.

Easy LayBy for online retailers using Tower Systems POS software

LayBy for websites is easy thanks to the Tower Systems web development team and their expert integrations with Oxipay for Shopify, WooCommerce and Magento.

POS software linked websites with the Oxipay facilities enable retail stores to transact online easily and quickly,l offering shoppers interest free payment terms.

Tower Systems is a leader in the Oxipay integrations, delivering fast and seamless solutions between physical and online store experiences.

Check out this from the Oxpipay website:

Buying the things you love has never been easier.

With Oxipay find the items you want instore or online and pay for them in 4 easy payments with no fees and no interest.

Oxipay makes it simple to shop with 100’s of your favourite online stores. Just checkout, select Oxipay and have the items you want today.

Breathe easy with Oxipay.

Add this to the wonderful Tower Systems POS software and bring it online through Shopify, Magento or WooCommerce and you have a best practice solution shoppers and retailers love.

We are thrilled to be playing at the edge of technology development for our retail partners.

Newsagents switching software – loving the low fixed cost of ownership

As the newsagency channel undergoes extraordinary change in 2017, Tower Systems remains a constant support through its best-practice newsagency management software, newsagent support and newsagent marketing help.

With more than 1,800 newsagent customers, Tower Systems serves more newsagents than all other software companies combined.

Switching is not expensive. If you have current hardware, the cost can be as low as $2,200 a year for three years after which there is no mandatory cost.

Included in the $2,200 a year (for only three years) cost is:

  1. The Tower Systems newsagency software.
  2. On site installation and training.
  3. Data conversion, converting as much data from your current system that we can access.
  4. Software support for the first three years.
  5. Software updates for the first three years.
  6. Unlimited over the phone follow up training for the first three years.
  7. Access to an online knowledge base with articles and advice on the software.
  8. Access to weekly group line online training workshops.

Alternatively, you can pay $6,600 up front and not pay anything for three years.

We offer this in response to the consolidation occurring in the newsagency channel. It is our opinion that not all current newsagency software companies will remain in the channel.

As the largest we are well resourced to help you navigate change not only in your software but in your business too.

  1. Tower Systems will not leave the newsagency channel.
  2. We will fight for you. Beyond our software, outside of support, we will help with supplier issues, business strategy and other challenges you confront.
  3. Our software continues to evolve. We release two to three major updates each you. You choose when to load them. Each update is thoroughly tested in a comprehensive beta program.
  4. We own newsagencies. Yes, we walk in your shoes.
  5. No locked-in support fee. Taking support coverage once the three year period ends is optional.
  6. Lower support costs. Also, transparent. No mates rates for a select few.
  7. Fast support. Most calls are handled when you call. If not, we call back fast.
  8. Easy management access. The leadership team of Tower Systems is available if you need them. We take customer service seriously and personally.
  9. Updates when you choose. You are in control of when you load updates.
  10. You are listened to. We offer the only transparent, user driven, software enhancement suggestion service. All our customers are listened to.
  11. Free training. Long after you install our software you have access to free personal training to refresh knowledge or provide training on new facilities.
  12. More integrations. Our direct links to Xero, Magento, Shopify and more mean you have more direct link options to help you grow your business.
  13. Business management insights. We can look at your business performance data and provide a personal analysis of what we see
  14. Owner access. Our owner, Mark Fletcher, is easily accessible: 0418 321 338 or by email on mark@towersystems.com.au.

The $2,200.00 offer is for three years: $2,200 per year after which you own the software forever. Data conversion is included. For the three years you get full support, software updates and access to unlimited one on one training.

The Shopify POS software link small business retailers love

The Tower Systems POS software Shopify link is another smart commercial link form Tower Systems. The link connects to this professional and popular e-commerce platform.

Retailers should only ever go with well-known internationally successful e-commerce platforms. Anything else can be problematic.

Shopify is one of the easiest ways to setup and run an ecommerce store. We think it provides you with the ideal place to create you first website and gain experience in the world of ecommerce. You have complete control over the look and feel of your online store and can instant access fantastic look themes to reflect the personality of your business. For more information visit www.shopify.com.au.

How does the link work?
The link works by using the TALink platform platform to connect to the shopify API and synchronise your data.

Stock
Retailer is your master stock database. You flag what stock items you want to appear on your shopify store.
Descriptions and extended descriptions are added as your titles and descriptions in Shopify. Newly flagged products are automatically added and if you edit items in Retailer you have field level control over how these are handled in Shopify.

Department and Categories
Your Retailer Departments and Categories become collections in Shopify. You can have a chose of either
Department level collections or category level, but not both. If you choose to synchronise either a department or category, your existing structure will be mirrored and managed in Shopify automatically. If, however, you decide not link your Department and Categories in Shopify, you can allocate collections manually to products once they are added.

Prices and Quantity On Hand
You have control over your webstore pricing from within the Retailer Stock Screen. Bulk updates of the webstore prices can be performed in Stock Manager. Once new prices are set, your web store is updated automatically. Quantity on hand is also managed automatically, when your sell or arrive an item into stock these adjustments are sent directly to Shopify. If the quantity on hand of an items drops to 0, the item is marked as out of stock in Shopify.

Images
The images you set against stock items in Retailer are automatically uploaded to your website. If images change, then old one is removed and the new one is added. You can upload as many images as you like per stock item.

Customers
Customers that purchase off your webstore are added as customers in your Retailer database, allowing you to track what they buy and market to them if you desire. Existing customers with an email address will also be added to your web store to facilitate easy sales if you choose.

Sales
Sales are downloaded on a periodic basis and imported into Retailer. They are imported into our Customer Invoice Maintenance facility allowing you to place orders and print invoices if needed. Once sales are imported it reduces your quantity on hand so you maintain accurate stock control. Sales can be allocated to a specific location.

Shopify is a dream too setup and connect with our small business POS software.

Newsagency software helping Australian newsagents evolve

The best-practice newsagency software from Tower Systems was a hit at a retail trade show where the latest software was on show, demonstrating exclusive world-class tools through which newsagents can transform their businesses, finding new shoppers and winning incremental business.

The days of the old newsagents are over and Tower Systems is proud to be playing a role in redefining what the newsagency of the future looks like. This starts with good software that is fit for the needs of the modern retail business.

With more newsagents switching to Tower Systems the strength of our community is growing as are the benefits of being part of something bigger.

More small business retailers connect with our SHOP LOCAL campaign

Tower Systems is seeing more small business retailers download and use the free shop local shop small business marketing collateral we have available to anyone to use from our POS software website.

Our amazing in-house creative team developed our initial shop local support and marketing collateral for retailers years ago. We have been adding to it ever since. Access is free, no questions asked!

We are grateful to those who have used the collateral and appreciative to those who have provided feedback. This encourages us to continue to invest in helping small local retailers to pitch their messages effectively to their local communities.

What does this have to do with POS software? Plenty, we say, plenty!!! Supporting the businesses of our customers is mission critical to us here at Tower Systems. We embrace opportunities to show our support beyond the software, beyond what is usual for a tech. company. That’s what this work is about – us showing our support and encouragement to help make a stronger and more successful small business retail community in Australia.

 

Amazing back to school software helping small business newsagents win back to school business in 2017

Tower Systems is thrilled its cloud based Back to School software facility booklist is winning plenty of business for small business newsagents in the 2017 back to school season.

Developed in close associate with small business newsagents, the booklist software has been a great and practical help this season.

From this project it is clear there is no one approach to managing school book list sales. We have sought to address the most common needs to provide a cost effective solution for our customers.

Built from the ground up, this facility provides a comprehensive solution to newsagents. The cost is $795.00 (inc. GST) a year.

Using the site you can:

  1. Setup a new school.
  2. Setup classes in a school and load all the booklist requirements for each of the classes.
  3. The booklist items can be loaded by a CSV file. You would record item description, price, supplier and supplier stock cost.
  4. Setup order close dates.
  5. Plus you have the ability to note when an order is ready for collection.
  6. The site will allow for you not having stock, thereby adjusting the amount to be collected.
  7. Share a link for parents to sign up and add their kid(s) to a class and to either take the whole booklist or select what they want. This makes selling and paying easy.
  8. The site will allocate logins to parents so they would have access to their order.
  9. Receive payment from the parents.
  10. Alternatively, the site gives the transaction to your Retailer software for payment by the parents in-store.
  11. Export a file of all items required to fulfil booklists, by supplier and by school. CSV you could load into Excel.
  12. Report on total revenue by school and class.
  13. The site would be accessible by desktop, tablet and phone.

In addition to the per year fee there would be a small card processing fee, on a cost recovery basis, for payments made online.

This software from Tower Systems is another example of the evolving tech platforms that can be used to help small business retailers to broaden the reach and appeal of their businesses, finding new shoppers and efficiently transacting new sales – all on a subscription basis.

We are grateful to the community of newsagents who have guided us on this project.

Tower Systems at Atlanta Gift Fair where gets, homewares, jewellers and toys were on show

The Atlanta Gift Fair that wraps up this week has been extraordinary for us and our small business POS software in terms of insights gained into gift and homewares trans as well as valuable supplier connections made.

Attending international trade shows like this Atlanta event broadens our knowledge of retailers, suppliers and market trends and this is reflected in software with a broader perspective. We urge other POS software companies to attend.

We are grateful to those who shared their insights with us in Atlanta. The connections made will be insightful.

Looking back on 2016 we can see benefits in our software as a result of attending the Atlanta Fair in January 2016.

2017 is going to be an exciting year.

The secret project that is providing Australian newsagents a bright future

Tower Systems has been engaged in a secret project for small business newsagents in Australia that has passed proof of concept.

Of all retail channels in Australia the newsagency channel is anticipating the most significant changes in 2017. The anticipation of change and the opportunity of new advances make 2017 a year of opportunity for newsagents.

Serving in excess of 1,750 newsagents as customers using its best practice newsagency software, Tower Systems has the largest single grouping of tech based newsagents in the world, making this community a perfect fit for the project.

The project is well advanced with many newsagents already engaged and banking valuable results. The advantage for newsagents who partner with Tower Systems is measurable and valuable.

This project is one of several being run by Tower Systems for its large community of users. It is another way the company reinvests for the benefit of its customers.

We are grateful to our small business newsagent customers for their support and encouragement. This new project is thanks to them.