The challenge of convenience retail for newsagents considering the switch

Newsagents contemplating transitioning their business to a convenience model need to thoroughly research the range of convenience retail offerings in Australia, and not just those nearby, before changing their business focus.

Convenience is about more than convenient hours or location. 7-Eleven, Coles and Woolworths have made it about value with every location every day offering nationally recognised products at discount prices.

The photo, taken a couple of weeks ago, shows a Coles Express outlet in Melbourne. Click on the image to see the clarity of their pitch on price. Count how many offers being pitched and the consistency of their marketing collateral – from the Coles express shingle to each of the posters and signs.  The strength of their value proposition – it is obvious from far away. They are leveraging the nationally recognised Coles brand and their down down advertising campaign that focuses on price.

This is what newsagents who transition to a convenience offer need to compete with to be noticed – they will need to consistently make a professional and understandable pitch on price from outside the business to attract shoppers.

Attracting shoppers is important because convenience shoppers are fickle. There may be some customers who shop with you regularly because they walk past every day or catch public transport nearby but the majority of convenience business is new or infrequent visitors shopping with you.

The Coles pitch is clever, designed to get you thinking that everything is discounted when it’s not. But enough is discounted to support the value proposition once inside. Their goal is basket depth with fuel used as the anchor product.

The other aspect of the push over the last few years by 7-Eleven, Coles and Woolworths into fuel is that they are taking more convenience business from stand alone retailers, retailers without fuel like the old mill bars and delis. This is driving a change in shopper behaviour with people walking to one of the new style fuel outlets for what they would have purchased from the local milk bar or newsagency.

While CBD convenience outlets like City Convenience focus on being convenient (and certainly not price) as their point of difference, the convenience competitors most newsagents face will be a mixture of the price focused giants: 7-Eleven, Coles and Woolworths.

Newsagents wanting to play in the convenience need to thoroughly research their competitors and develop a model that is sustainable for a locally owned independent business. They need to make any move knowing what they will be up against in terms of the better supply terms and the consistent and professional marketing pitch of the majors.