In October last year I wrote here about work being done by Coles supermarkets in experimenting with and developing an in-store newsagency model. I had seen the first such model at Bayswater in Victoria.
Today, a year later, Coles continues to experiment. From what I have seen, their work on this project is paying off. They are delivering browser friendly newsagency like experiences inside supermarkets.
Whereas in the past a magazine purchase was often on impulse at the counter, now, in one of their new style stores, you can see people browsing just as they would in a local newsagency.
Look at the photo from a suburban Coles supermarket I visited last week. They have an excellent layout, presenting over 400 magazine pockets. Plenty of these are full face. The professional signage makes navigation easy.
I expect that Coles is looking to deliver a similar look and feel to greeting cards and that cards and magazines will be next to, near or opposite each other in a wider than usual (for a supermarket) aisle.
While Woolworths is not as advanced as Coles is with its ‘newsagency’ project, they will follow. This is what supermarkets in the UK have done with terrific success. Coles has people from the UK working with them on this project.
Newsagents can respond to this challenge, many are. But we can’t wait. We must act today on our businesses otherwise we will wake up a couple of years down the track and wonder where our customers have gone.
Australian shoppers are not as loyal to newsagencies as we would like to think. The Coles offer is better than that of many newsagencies and once shoppers enjoy satisfaction from the experience I would expect them to return.
While we can complain about the power of the big two supermarkets, nothing has stopped us reinventing our retail model. Sure, some newsagents have, but not enough.
The one key barrier to us reinventing ourselves in the magazine space is the lack of control we have over range and supply volume. The relationships between magazine distributors and newsagents dilutes our opportunity to be competitive with the two big supermarkets. However, that is a topic for another day.
During August I was fortunate to attend a Westfield breakfast seminar about retail trends, and there Coles was a major speaker.
The Group Operations Manager there outlined Coles operational plan for the next 5 years.
Get ready fellow newsagents – you are firmly in their crosshairs.
While we bitch and moan about who is wanting to join representative bodies for whatever reasons, nobody is focussing on the REAL issues like strenghening the channel to compete with these corporate monoliths.
One day when many newsagents become relics, many will sit back and regret the missed opportunities.
Darren,
I am focused on the real issues here at this blog (for six years) and and at the newsagent workshops I regularly run around the country (for many years).
More than 400 newsagents attended my Newsagency of the Future workshops a few months ago which were designed to open eyes. Based on conversations and activity since I’d say they made a good start.
What you heard at the breakfast in August was covered here at this blog a year ago.
While newsagents are responsible for business critical decisions they make in their businesses, they need supplier relationships which do not make then uncompetitive in core areas.
Mark,
Westfield do not promote old information.
You cannot have blogged this information 12 months ago. This was totally new content.
Darren go back and read what I wrote a year ago and then tell newsagents how the infromation you have and have not published is different.
Darren, Mark,
You both are making an excellent point it really doesn’t matter who said what first it matters that it exists and what is the channel doing about it?
yep that was pretty funny “i said you said no i said no you said ” dosn’t really matter . On the plus side for me anyway coles down the road has been running at a loss for a few years now so there days are numberd they were ment to sell out last year to food works but that didn’t work out so for me anyway i cannot see coles doing a great deal to effect me but on the other hand when woolies catches up it will not be good so then you will probally see me crying about it . oh well might have to start selling veggies on a sunday straight from the farm .
I own 5 supermarkets in NSW and look at this blog everyday for ideas and inspiration. The problem I see as a retailer looking at newsagents as a customer is they atre tired, and offer the same stuff as 20 years ago. I seel most of the stuff you guys sell and am thinking of getting into things such as Halloween and ink coz its spoken about so much ere and on other blogs in your channel. What newsgants don’t do is market to their local market and do not chnage up or change down, it looks the same everyday you go in. A firned of mine who is in your undustry is telling me that a lot of newsagents have closed. My secret is do not go into a shopping centre. I am in strips or small village set ups and I pay less rent make more profit and sell, sell, sell.
My shops have a core range butr are differnt in that i ahve different ranges to suit each area.
Maybe its too late an you have given up too much ground to your competitors. I am in a banner groupo and the independent supermarkets who are under banners mostly thrive if they are on the ball. I am not part of any association, my group does everthing for me and I network with like for like stores and get out of my shop and look at competitors.Coles is changing rapidly and are also taking market share of other small business. If I was you I’d look at what is happening in the UK as thats where most of the Coles guys are from.
I went to Bayswater last year when you wrote about what Coles was doing. I have to say it was a wake up call and I have been making changes in my business as a result. I have a Coles three doors away and what I saw at Bayswater proved I had to change.
Nothing personal but I found it funny to have a supermarket tell me that I look the same everyday.
Brett
Come down to NSW and have a look you would be horrified. I look at the ones at the airports and they are really good and are always changing. Some supermarkets are shockers too,don’t worry about that. My concern for you guys is there does not seem to be a battle plan and you are behind pharmacies in terms of locking up your market and and staving off the wolves. I think your channel has missed the boat and now its just a matter of survival. Once I get lotto in my stores I will sell evrything you do. Lotteries will need more outlets as newsagents continue to fall away.
I wouldn’t be getting too carried away with Lotto Lambros, it is not the drawcard is presents to be.
As you have stated above, you are thriving dispite the big two chains and it is not a given that they will swallow us up as they have failed to swallow the smaller supermarkets up.
In our city we have just had another 2 large supermarkets open (so now we have 3 each of coles and woolies as well as Kmat, BigW and both Targets), but it is not all doom and gloom. While they sell the same things as everyone else, not everyone chooses to shop like cattle. We are seeing good growth in new customers as well as our regulars that are fed up with only having option A or option A and are looking for a more local experience, which is what newsagents are.
I get your point and it needs to be taken on board but like yourself, only the weak will lose out, not everyone.
Have we not seen it all before ,fruit shops butchers all still in shopping centres . In brisbane you can see in the western subs,craft books on the cigs stand.Woolworths is cutting their mags ,maybe they know somrthing coles do not and in the end it will need to pay their way
Jim, butcher and fruit shops have changed. This is what we need to do … to find our own future.
Newsagents are thinking and talking about it – it’s a common topic when newsagents call me.
Mark
Please don’t get me wrong but I think that as newsagents we love to read this site and gain knowledge from all over. But I think sometimes we give too much information away to others. I know the world is changing and we must change and I’m sure many of us are experimenting with new products all the time. I really don’t think comments from Lambros are necessary.
Greg, it’s an open place where all are welcome to comment.
Thanks Lambros for your good advice and observations. We should be careful not to become like the Ostriches. There will be less of us just as there are less butchers service stations and delis. The fit as always survive.
Lambros,
We own a combined supermarket (top-up store sized) and newsagency here in Singelton NSW and I have to agree with you on most points.
For the most part, news agencies are old and tired. The number that buck that trend are, from what I hear, naturally doing well. Unfortunatly the vast majority of the industry is stuck in the past with old shop fits, old offerings and old ideas.
Interesting that you mention strip shopping centers. I am also of the opinion that strip shopping centers (or very small complexes in residential areas) are more often than not a more profitable option for supermarkets. I would think it a little different for newsagencies in that they would benefit significantly from the increased foot traffic in a large shopping centre. I would also imagine they would have notably more success with higher margin lines such as calendars, diaries, gifts and books.
We have found huge success in combining both the supermarket and newsagency in the one store. The store is split so thst the newsagency is in the front half of the store and the supermarket is in the back. Customers walk in through the newsagency (where they are greeted by a reasonable sized display area that changes at least one per week, often two or three times) and then into the supermarket where there is the traditional front of store fresh product offering. To exit the store customers must walk back through the middle of the newsagency where they face four power ends that are also constantly changing. As. Customers line up to be served they have have magazines (weekly, womans interest, health wnd fitness, fashion, food and teen) on one one side and greeting cards (lifestyle – including a large sound card display that is very popular with waiting kids) on the other. The mix of the two allows the supermarket to leverage morning traffic from newspaper and magazine customers and the newsagency to leverage the traffic from afternoon supermarket customers on the way home from school and work.
As for banner groups your right. Almost everyone in the supermarket industry is aligned with a banner group. Most of those that did not align with a banner group have died off. The only role supermarket associations really play is in industrial relations where they lobby and provide advice on matters such as awards. Everything else is managed (and managed well) by banner groups.
Jarryd
I have seen your store. Its great and I am modeling my next one on your swith some slight variations. How do I am thinking of getting supply form magazine publishers for this one and trial it.