How newsagents are adapting to a rapidly changing world

Amid the news of media mergers and challenging newspaper circulation numbers in Australia and worldwide, here’s a happy headline: newsagents have been adapting.

A recent survey commissioned by the Australian Lottery and Newsagents Association and conducted by Retail Doctor Group showed that almost four in five Australians are still newsagent customers and one in three people visit their newsagents at least once a week. Their continued survival and success is particularly startling in an era where retailers with a physical presence have struggled against the rise of e-commerce.

While it’s not all beer and skittles, the lottery and newsagent industry remains one of Australia’s largest independent retail and home delivery groups. The industry employs more than 20,000 people and boasts a turnover of $6 billion. About $1.3 billion of lottery proceeds become tax and grant revenue for respective state governments that, in turn, fund schools, hospitals, emergency services, the arts and infrastructure. It’s an industry that beats at the very heart of the economy.

But what’s the secret to this resilience? It seems newsagents have learned how to make the most of their physical presence, diversifying their offering and connecting with their community.

The in-store experience

Newsagents are geared towards two kinds of consumers: those who are after convenience and those who are looking to browse. Many are set up to cater to both with a fast service counter at the front of the store for people grabbing the paper, a drink or a lottery ticket, and a deep interior lined with other products to browse, from quality diverse gift items and toys to traditional lines like magazines, stationery and collectables.

Two of the biggest advantages over online shopping – convenience and “browse-ability” – have kept newsagents in business. More than half of newsagent customers visit because of convenience and, for one in two, the newsagent is a destination retailer. Some 34 per cent of Australians were moved to visit when walking past a store, so physical presence allows for serendipitous drop-ins.

But in addition to having a physical presence, newsagents have also embraced, rather than fought against, having a digital presence. Savvy newsagents understand how to leverage online channels such as social media to attract omni-shoppers who like to shop both in-store and online. This gives them a digital presence where information on new stock or special promotions leads people back to the store.

This has been made all the more possible since March 12, when the Lott announced a positive new remuneration model. Among other things, the new model means newsagents will now be given a financial reward for omnichannel retailing, giving retailers access to online sales. For the first time, there will be commissions on digital lottery spend made by the growing number of bricks-and-mortar customers who like to buy lottery tickets both in person and online – a big step towards a truly cross-channel world for retailers.

This is a show of confidence in the industry by Tabcorp, recognising that the newsagent is here to stay, and its customer connection is key to success.

Diversification of services

The ability of newsagents to change their offering has served them well at a time when much print circulation is on the decline. In addition to printed media, traditional newsagents would also offer a smattering of stationery items and a countertop of confectionery. Today’s newsagent has taken that model and flipped it to serve customers’ changing needs.

Results from the survey suggested that 79 per cent of people would visit a newsagent more often if they offered other services, with the top service nominated being a post office at 63 per cent. The number of hybrid newsagents suggests many in the industry have already listened to their customers, evolving to cater to the market.

Newsagents around Australia have combined with bookshops, post offices, cafes, florists, design and printing businesses, IGA supermarkets, art supplies shops and pharmacies with great success. Some newsagents have discovered that there is a sizeable market of customers who like to collect things, with items like collectable plush bears becoming a significant source of revenue.

In many neighbourhoods, newsagents outcompete local gift shops, toy stores, hobby shops, and stationery and art supplies stores. And while they may not sell as many newspapers and magazines as a decade ago, for one in three people they’ve become a destination retailer for stationery purchases and, for more than one in four, a source of locally made products.

Becoming a community hub

Having a physical presence also allows newsagents to become a community hub. Many are anchor tenants in shopping areas, particularly in regional towns, and are therefore well-placed to operate under a “community concierge” model. This is a style of customer service where either the newsagent provides many products and services for the community or becomes a neighbourhood signpost, pointing to where people can source things it cannot provide.

Beyond that, however, is the X factor: providing quality human interaction. Having friendly staff who are knowledgeable about what they have in-store but also know what’s going on in the community will bring people back time and again. It helps that many newsagents are small, family-run businesses, with over 4000 independent, family-owned news and lottery agents in Australia.

The industry’s focus on the community will be the highlight of the inaugural National Newsagent Week (June 8-16). Newsagents around the country are set to celebrate by holding charity fundraisers and recognising special members of the community as well as hosting competitions and promoting special offers.

Newsagents’ ability to listen to their customers and adapt to changing community needs, innovate with their business models and provide quality human interaction has helped them survive and thrive in an environment where other retailers have struggled.

It’s a lesson other organisations should heed: the shift in the popularity of one’s primary product – in this case, newspapers – does not have to spell the end of the business. Instead, it’s an opportunity to learn how to evolve in a world that is rapidly changing.
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Ben Kearney is the CEO of the Australian Lottery and Newsagents Association (ALNA), the peak national industry body for Australia’s newsagents and lottery agents.

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