US stationery retailer Office Depot is following the lead of Staples and Office Max and rolling out a smaller store concept.
The change followed a tour of stores by new CEO, Kevin Peters. As widely reported in the press, Peters conducted his own mystery shopping research in plenty of the Office Depot outlets.
Peters discovered that shoppers who did not purchase were not happy with customer service or store navigation. This is what he has set to address with smaller format stores and more full time employees.
I expect that when Staples starts rolling out Staples branded retail outlets here, they will try the smaller format stores. Given their excellent focus on and connection with small business shoppers, such a move would hurt newsagents. Officeworks is bound to follow.
There was a time when newsagents owned stationery sales in Australia. A visit to newsagencies today could indicate that as a channel we have given it up.
Newsagents could/should get on the front foot with stationery today by fixing what I consider to be a somewhat broken category in our channel. Here is what I suggest:
- Review your stationery department. Look carefully at what works and what does not work. Look at your business data.
- Consider seriously quitting items which have not sold in six months as they are not paying for the space they occupy unless they deliver excellent margin dollars.
- Talk to GNS about their top, say, 500 sellers in your state. At the very least, you should stock these and price them keenly to push back on the consumer view that newsagencies are expensive.
- Look carefully at your stationery layout. Is it easy to shop? Are prices clear and easy to read? Are sections well sign posted?
- Do you run stationery promotions outside your store, in the local newspaper, through catalogues? If not then consider this. People will not find newsagencies as they have in the past, you need to go out and find them.
- Are your employees well trained? Test them. Make sure that they know what you stock and why shopping with you is better than your stationery competitors?
- Who knows the most about stationery in your newsagency? Are they on the shop floor in your busiest times and if not, why not?
- Do you and your employees step out from behind the counter and genuinely help your customers? If not, why not?
- Go back to your business data. Look carefully at the return on investment you are getting from your stationery department. Look at sales this year compared to last. Make sure that you understand why there has been a sales shift (up or down) across the periods.
- Your business data is the best navigation instrument you have to increasing stationery sales.
- Talk to local businesses who do not buy their stationery from you. Find out why. Find out what you need to do to get their business. Opening these conversations could be tremendously profitable for you. This is what our biggest competitors do.
- Talk to shoppers who visit the stationery department without making a purchase. Find out why.
Newsagents have all manner of excuses why stationery sales are not what they used to be. While some of these may be reasonable, making excuses does not help you move forward. The only way to grow your stationery sales is to engage in making changes in your business, as Office Depot is doing in the US right now.
What changes are you making?
Stationery is one of the few departments where you have full control. The performance of stationery is the best indicator of your performance as a newsagent. How are you doing?
The only stationery I buy from newsagents now are Mitsubishi pens (UniBall brand etc). Even officeworks doesn’t carry the range that newsagents seem to.
The reason I stopped buying office stationery from newsagents is simply price. The newsagent I formerly purchased from had a business catalogue (pdf) done up each quarter with full pricing & monthly specials in a newsletter. Prices were always cheaper than officeworks. (Who are overpriced to begin with)
Since it changed hands the new owners do a non-priced catalogue, and their prices 90% of the time are more expensive than officeworks. What pushed it over the edge was their toner prices jumping. When you order 2-3 at a time and the price jumps from $55 to $85 without warning thats one heck of a bill shock.
Our stationery sales have grown every year for over 7 years since we purchased the business. I put this down too 2 main reasons, 1) Using the reorder capabilities of our point of sale program so that we rarely run out a stock item that sells regularly, This has worked with both MYOB and now Tower pos systems to keep the best sellers in stock. 2) Being prepared to special order in stock that we don’t normally range. We order from GNS 2-3 times weekly so can offer customers great service for stock that they are having trouble sourcing.
The frequent ordering allows us to keep minimal stock quantities on the shelves and reduces the risk of being caught with old stock. I’m amazed at the number of stores that do not use their POS system to this advatage.
Mark you are spot on with these points. The Newsagents using these steps are experiencing more than CPI growth on their sales in this segment. Using the Point of Sale system to help manage stock, as Brendan suggests, is an absolute must. Consumers do come expecting stock to be available.
The consumer is very wise on what is considered to be either a best market price or a reasonable price for an item. (Especially in a tight economy, with stationery as it is mostly considered a consumable). Newsagents need to have pricing policies that meet the consumers’ expectations in this regard. I find that not enough Newsagents benchmark against local competition and the ones that do, can easily compete.
GNS is doing a lot of work, via our field support, to help establish standards on category flow in store, as well as work with the newsagent, to match categories & products to the local demographic. We have available a merchandising guide that simply demonstrates, via images, how easy it is to establish a solid approach to category management, which Newsagents could use themselves. I am very pleased with the work our field support manager does, but I would suggest that the Newsagents who take on this process themselves, involving staff, are more likely to maintain and improve on what is implemented, rather than if we assist the store on their behalf.
Just to finish with a plug for the GNS Market Fair, (WA on 31st July, NSW on 6th &7th August, VIC on 20th & 21st August, QLD on 10th & 11th September) In all seriousness, this is an opportunity for Newsagents to speak to industry Marketing groups, shopfitters, Point of Sale providers, GNS Field support, and industry suppliers, all with the tools to help Newsagents improve their offering to the consumer. I would encourage all Newsagents to attend with a clear vision of what they wish to achieve in the next 12 months.