Lateline Business last night carried a story about Gerry Harvey’s desire to win the Officeworks business for his Harvey Norman group out of the sale of the Coles Group. The interview with Harvey was a deserved slap in the face for newsagents.
Newsagents ought to watch the Gerry Harvey interview in full. It shames us. Harvey is right when he says: “there’s not a lot of opposition out there to Officeworksâ€. Sure, there are more newsagencies in the stationery space than Officeworks stores but we get it wrong. We devote too little space to stationery, adopt out of date pricing practices, do not harness our national footprint, manage brands badly and have not moved into the big box space.
Newsagents have rested at the nipple of regulation for too long. Look at how much of our floor space we devote to newspapers and magazines for 25% GP. Compare this to stationery space where we control pricing and ranging. Are we process workers or entrepreneurs. Our shop fits answer that question. Gerry Harvey is right, Officeworks has no competition – certainly not from newsagents.
Gerry Harvey is a brilliant retailer. Officeworks under his control would force those few newsagents doing stationery very well to step up or get out.
If we were smart, suburban newsagents would have banded together and created superstores to compete with Officeworks. We could have done this, targeting Officeworks, while maintaining stationery departments in our shops for local shopping.
It is all very well to talk about newsagents banding together to compete against the majors (a concept I am all for) but have you ever tried to get into the OfficeSmart “club”?
For over 18 months I have tried but the silence and inactivity have left me wondering.
Thankfully, things seem to be on the improve in this area and we might get a fair hearing this time round but how can newsagents be told to get serious about stationery then be denied access to the pricing, catalogues and other marketing which would enable them to do so!
I agree with Jim totally, in Lismore one newsagent has officesmart and is doing a very bad job at it, but when we approached GNS to offer it we were told no that we were not allowed. You cannot compete with your hands tied.
I understand why GNS restricts access to Officesmart – they think it helps newsagents make more. I think history has shown that to NOT be the case in all but a few territories. To compete with Officeworks we need a big bold retail presence supported by smaller retail footprints EVERYWHERE.
Mark – if the rules by which GNS decide who can and who can’t be part of OfficeSmart were consistently applied then I might start to understand them.
You wouldn’t believe some of the crap I was fed when I first expressed interest by a person who probably hadn’t been more than 25km from the CBD in their life! My thoughts then (and now) were that if this was GNS’s idea of territories, then God help us all.
Your concept of a big bold retail presence supported by smaller retail footprints EVERYWHERE is exactly what newsagents need but we will never approach that whilst current club membership rules apply.
Interestingly, the guy who triggered this blog seems to understand that and can tailor his business presence to match the demographics.
I can understand the rules not allowing more than one presence in a town or defined area but when you are the only newsagent interested in pushing stationery in a 40km radius and your only real competitors are Big W, OfficeWorks and other stationery franchises such as OfficeChoice or OfficeNational (all outside the 40km radius) then I don’t understand the decision making.
The concept of one supplier per territory is not relevent in todays market place. All the big operators do not play by these out of date rules, big W,coles, even harvey norman all co locate in order to saturate the market. Would we accept it if Lotto was only available at one newsagent in each town, just so that operator could make all the money, I don’t think so. The more suppliers the more money being made. Every newsagent who has an account with GNS is a shareholder and as such should be allowed the full benefits of GNS. The idea that some members are better off then others is a joke. Let the market decide how many operators it will allow not people who sit in offices all day and would not have a clue what is going on in the real world.
I think that those people who sit in offices all day and would not have a clue what is going on in the real world believe that GNS stands for Great News for Some.
Make no mistake, the market WILL dictate who will survive and if the Gerry Harveys of the world get their way then it’s curtains for the rest of us regardless of whether you are a part of a 300 member club or not.
The only way newsagents can survive this latest threat is to become a national marketing group fully leveraging the buying power we could exert via a structure not dissimilar to that used by a number of others e.g. Mitre 10, Retravision, etc.
By all means let the big players get the biggest discount but for God’s sake let the rest of us who can play in the game at least get access to the marketing!
Jim, It is surprising how much suppliers are prepared to fund marketing. This is where newsagents miss out. I agree with you. We need to unlock this for our businesses. Urgently. Mark