Many newsagents manage stationery today as it was managed by newsagents decades ago – before Officeworks, Australia Post, supermarkets and other mass merchants were in the stationery space. Newsagent suppliers also manage the channel as if time has stood still. This ignorance of today’s marketplace is both a problem and an opportunity for newsagents.
Take everyday pens and markers. Most newsagents have a good range of two brands. Many have three brands. Each is serviced by their own representative, calling on the newsagents and processing orders. These reps have one responsibility – to move stock out of their company warehouses. While most process the orders, these are ‘turned through’ newsagent warehouses with an additional cost for newsagents of between 5% and 10%.
So, we are buying badly because of a labour intensive sales process, deals add to the cost to support newsagent warehouses and newsagent time is taken dealing with reps. None of our competitors have these costs.
Smart newsagents a re tightly managing the time they give sales reps. They are also establishing direct accounts and negotiating better deals – so they can compete. This is where there is an opportunity – for entrepreneurial newsagents.
For our channel to compete in today’s marketplace it has to rid itself of practices which disadvantage us. While that will be unpalatable to longer term newsagents, suppliers and possibly industry owned warehouses, the reality is that unless we cut costs out of the supply chain we will not be able to hold our own in the stationery place.
There is a case to be made for carrying the whole range of one brand opf everyday pens and markers. This increases negotiating strength and enhances the in store story. It also cuts time with reps. So, with more time, more capital and unlocked retail space the newsagent can evolve their business to be more competitive.
Being a member of a large newsagent group, I would expect that someone within the organisation would come up with a planogram and layout for stationery the same as the large retailers, I understand where newsagents come from when we only see the range the reps show us and order on what they think will sell but surely between Newspower, nextra and newsXpress there can be a collective approach to what we stock and what sells well, it can be done with ink and toner why not the rest of the stationery range, then we can put pressure on GNS to only stock these lines and reduce the instances of stock being unavailable ie cheap copy paper.
Luke, I think you will see this. It starts with accessing the right product at the right price. Once this is in place then planagrams can follow. Mark