7-Eleven stores are independently owned and operated yet they trade with a discipline that drives success. The discipline is embedded in the agreement behind the brand. Network-wide discipline will see 7-Eleven beat newsagents when it comes to supplier deals.
Around Australia and across the globe from the consistent shingle in, the brand stands for something, something consumers understand a trust.
7-Eleven has fewer retail outlets than newsagents yet it achieves more in its negotiations with suppliers lottery tickets, transport tickets, FMCG items and magazines. This is why I say 7-Eleven will beat newsagents.
Newsagents are weak because they refuse to work together. Yes there are some groups working together on some products, but not at the level being done in 7-Eleven. This is why we can’t sell mobile recharge for the margin of 7-Elven or sell iTunes cards at the discount offered in 7-Eleven.
Our business model relies on shoppers visiting multiple times a week. Every time one of our shoppers shops at 7-Eleven for a paper or a magazine or a phone recharge is another step they take away from our businesses.
Our strength is the critical mass of our retail network. Our weakness is the lack of discipline – the inability for us to genuinely to work together for the good of the whole – of our retail network.
While this post could be about Coles and Woolworths, I chose 7-Eleven because of their independent ownership and the discipline they demonstrate at the store level. Yes, there are poor stores where discipline is weak. However, I suspect their percentage of the group is far lower than the percentage of undisciplined (selfish) newsagents we have.
Footnote: there are newsagents building strong independent businesses. This post is not so much about you. It is about newsagents who proudly show the newsagent / newsagency / N shingle thinking it, of itself, stands for something.
We are weak because we accept what ever offer is thrown at us . We should be asking why are we accepting the less % for that phone credit and then show them the door if it is not matched but instead we say it gets customers in the door .
Could not agree with this post more. Here in North queensland we keep seeing other newsagencies as the enemy or the competition, yet we seem non plussed by the advancement of coles and woolworths into our territories. Wake up Newsagencies and band together! there are plenty of newsagencies in NQ that do not work together!!
i could not agree more Mark, i wish all newsagents could band together with a common message, we would have enormous market clout. But alas too many dont want to play the game and continue to live in the good old days, so we all lose. im about to change marketing groups in the hope that the new one will represent a truly professional approach to running a bisiness.
in these changing times nobody knows what newsagents stand for anymore, WE NEED TO BE PROFESSIONALS EVERYBODY
In 2012 I suspect what we need is not a new newsagency group. What we need in 2012 is a retail group that just happens to be made from existing newsagencies.
mark, what we need is an independent commission, [i.e. NRL style. ] run by professional business people employed by ALL newsagents. this replaces the ineffectual state & national assosiations, which are run by genuine, well intentional newsagents.
we need a modern, collective approach headed by professional business people who i am sure could return our investment in them, 10 fold. when a deal is stuck we must all embrace it.
business must be the focus not policy.
The shingle – Newsagent / Newsagency / N – needs to be commercially owned and a franchise or licence agreement needs to be entered into by any retailer who wants to trade under this. Such a legal agreement is vital to ensuring discipline around the retail brand. Ask any 7-Eleven franchisee. Without such a lever, the Newsagency / Newsagent / N shingle will continue to fade compared to our more disciplined competitors.
I think this is where the associations have let newsagents down.
7-Eleven may also have better negotiators than whats in the newsagency industry.
Ted, As noted in my previous comment, associations do not have the lever to drive discipline.
If I was running an association I’d introduce a lever around the national branding.
In some states it’s the major supplier that let’s the channel down. At the store level we are trying to provide great service, but are continually hamstrung by a supplier that has not moved with the times, does not seem to be able to negotiate deals, and is generally hard to deal with….
Hamstrung , we have let this happen time and time again . Why would a supplier want to negotiate with us when it is a do as we say deal at the moment for most of them .
I’ve found it interesting that you’ve made this post Mark as I’ve always identified in my business planning 7-11 as one of the business models I would most like to transition the newsagency side of my business into as the newsagency shingle declines in value/relevance. It would actually be interesting to see how the newsagency and 7-11 “brands” are recognised in comparison to one another in a consumer recognition survey. Will have to have a look and see if Roy Morgan Research has done one.
I have to agree Mark. Newsagents have historically wanted the power of one, but when it comes to banding together, they find excuses to go it alone. Sure, newsagents have a decided advantage in their community values and respect, more so than the likes of 7-Eleven but refuse to band together for the improvement of the industry if it does not quite suit them at the time.
I believe newsagents still have a strong future provided they allow the marketing groups and/or national and state bodies to lead the way to better supplier negotiations and start embracing the national deals. Newsagents still offer one of the best footprints in the Australian retail space and have proven their resilience through tough times.
Now is the time to flex some of this strength and demonstrate the ability of a channel that can launch and promote products outside the traditional magazine part works and one shots.
I feel it is about making newsagents relevant in a market that is shifting to online retailing. Capture some of the Gen Y market while they are still out in the market and demonstrate newsagents can be a retail outlet they want to walk into.
Back to 7-Eleven, the world is not perfect for them either, but they are willing to work as one to improve their stature in the convenience retails space.
Hamstrung you are placing the blame elsewhere.Just as so many Newsagents do.It’s not my fault it’s theres.
These sort of comments and that way of thinking need to be changed if there is ever going to be a way forward.
Too many in the business think like that,it is easier to blame someone else than admit your own business faults.
Mary you missed my point! Perhaps it is my error in calling them a ‘supplier’ rather they are a ‘distributor’.
Shaun S I agree.
I was not complaining, we work around the distributor and provide the customer with what they want.
I was making the point that too many newsagents don’t. Either they don’t know how or they are too tired to do so.
So when a major distributor trades like it is still pre 2000, it means that the whole channel is affected. Why would I order stock from them to ‘support the channel’ for 3% rebate when I can buy the same product from a competitive retailer for 15% less?
Blame was not being handed out, rather a point being made.
7-eleven has centre billing for major suppliers, and that is the power for a better deal.
I have customers come into my store from away on holidays etc and comment that where they come from they can never find gifts and range of gifts in newsagency where they come from .if we were to trade like a 7-11, we would loose that uniqueness about us . There are 3 news agency’s in my town and for all 3 to have the exact same store would not be a good move
Shauns, we can be consistent without losing our uniqueness but customers rightfully expect to walk into a newsagents and have certain services and products available to them. This is where being different lets the shingle down and we need strongly defined core products and services the we OWN to keep us relevant.
I would like to see us all have lotto products, core stationery, gifts (to suit the individual outlet), greeting cards (whatever the brand), even basic postage products (but on a commercial basis). A strong brand could and should negotiate these things and all newsagents should stock agreed core product for the sake of consistency for the customer. Service and other products would provide the customer with a basis for choice of outlet where more than one was in close proximity but some uniformity is needed to define us as the one shingle otherwise with time we will just be a lot of subagents with little in common and there is no strength in that.