Author: Mark Fletcher

Sue Dunlevy, writing in the Daily Telegraph (Apr. 21) complains about the amount of time one has to spend in the queue at supermarkets to get service compared to the “corner shop”. Dunlevy poses a valid question:

CAN someone please explain to me why we can play movies in our cars, send emails from McDonald’s and take photos with our phones, but we can’t get rid of the supermarket queue?

At newsagencies, service is faster. Sure there might be a queue, but I bet it moves much faster than at a supermarket. As Dunlevy points out in her article, you’re more likely to see the owner manning a register in the busy time at a corner shop (and a newsagency). At Coles and Safeway in the busy time you’ll find managers a long way from the check out counter. Newsagents are often at their counter.

Supermarkets are built around check out queues. Look at their configuration. It’s about regimentation, control. Newsagents offer a more flexible and customer friendly shopping experience. It’s this regimentation which bigger companies like. Look at Vodafone, they have Coles on 16% commission and newsagents on 5% commission yet newsagents provide better service. Apple did a deal offering music download recharge for iTunes exclusively through Coles while newsagents could have provided better service.

Dunlevy goes to the edge with her criticism:

It’s worse than a pap smear and more stressful than a visit to the dentist – but you have to endure it at least once a week to feed your family.

The alternative is to find a local shopping centre with good newsagent, greengrocer, butcher and small supermarket. You’ll get local (faster) service, access to greater range and less stress from the slow moving queues at Coles and Safeway.

Over the last ten years newsagents have innovated and brought new products and services to their counters, they have embraced technology to improve the accuracy and speed of transactions. They have enhanced customer flexibility. If they can do this at the small business end and still usher customers through quickly them why not supermarkets?

Dunlevy’s article is encouraging reading from a small business perspective. Good on the Daily Telegraph for giving space to this issue.

And while we’re on queues I can’t let the topic pass without observing that Australia Post is as bad as ever. The line snakes through the government owned outlets with either side of the line appropriately littered with impulse purchase items (which have nothing to do with postage).

Dunlevy ends her piece suggesting it would be good if consumers took action and abandoned their full trolleys. While that may be impractical, a good start wold be to buy newspapers, magazines, greeting cards at newsagents. The price is the same, the range far better and the service faster and more enjoyable. A dollar spent on a newspaper, magazine or card at a newsagency is, I suggest, more efficient for the economy than a dollar spent at Coles or Safeway.

When first published Wednesday, Nicholas Gruen In Re-imagining economic reform, published at the New Matilda, wrote that (among other things) that most economists agree that newsagents “still need some old fashioned deregulation “. I emailed Gruen asking him to elaborate on this. He responded with: “Perhaps it would be worthwhile investing some of your own time explaining what claim you are referring to, what your own perspective is (if any and so on). Do you have any idea what I have in mind regarding the suggestion?” I quoted his words back at him and included: “I’d be interested in knowing what old fashioned deregulation newsagents need. Since it’s a published article I consider it reasonable for you to justify the opinion. My perspective does not matter. However, I own a newsagency.” I note that yesterday, the article was changed and the reference to newsagents removed.

There is a misconception in many circles that newsagents are protected. They are not. We were deregulated in 1999. Supermarkets, convenience stores, petrol outlets, coffee shops all get magazines directly from the suppliers. They choose the titles they carry. Most carry the top 100 or so titles. Newsagents don’t have the luxury of controlling what they receive. We know from the recent cash flow study that 65% of magazine titles in newsagencies are cash flow negative. This would not be the case if newsagents could control the titles they received and the quantity. The government deregulation push which was overseen by the ACCC has left the small business channel severely disadvantaged.

Footnote: late last night Nicholas Gruen emailed me saying, in part: “The list was from an article I wrote a few years ago, and I thought it was current. On reviewing the situation, I find to my dismay that there has indeed been considerable deregulation since I last looked! Please accept my sincere apologies for my oversight. I know it can be irritating to read things in the press that are inaccurate and do my best to be accurate and failing that to correct inaccuracies when I become aware of them.”

Betcard was touted to newsagents as the next big thing. It was going to revolutionise gambling. In NSW especially the state newsagent Association, NANA, got right behind the opportunity. It seemed a sure thing since newsagents were told that Saatchi and Saatchi (as reported in B&T) and Channel Sports were behind the betting play. Newsagents were asked to prepay for Betcard stock. More than two years on, newsagents are chasing a refund for the cards they purchased. There’s not a word from Betcard nor the companies touted as being behind Betcard nor from the NANA Directors who so strongly supported Betcard to newsagents.

There is noise among newsagents that lotteries are moving away from them to clubs and big business. Getting a straight answer from Tattersalls, Golden Casket, NSW Lotteries, Lotteries SA and LotteryWest seems to be a challenge. If newsagents lost lottery traffic it would severely impact as they rely on habit driven lottery traffic to pull sales of newspapers and magazines – fixed price low margin products as are lottery products. Governments, State and Federal, ought to be interested in this. Newsagents have done an excellent job making lottery products accessible across the country. Now that brands are well established it would be grossly unfair to move the products to other channels.

Eight months ago we launched an online ink and toner supply business, Inkfast, to see what we could achieve with a purely online business compared to selling the same products in our newsagency. Inkfast was advertised primarily on Google with some recent work with Yahoo. We’re at over $40,000 a month in ink and toner with most customers of the sort we would never see in a newsagency. The cost of customer acquisition has been falling steadily since month three to the point where we decided to rest the Google campaign and see what happens. Such a pause is timely going into Easter. It will be interesting to see the impact.

A key learning for us from this online business is how smart newsagents can leverage their infrastructure for access to customers their bricks and mortar business cannot access. Inkfast has been grown on a tight budget. Less control on our advertising spend would, I am sure, lead to over $100,000 a month in ink and toner sales. Leveraging these business customers who would not usually shop in a newsagency into other products is the next phase of the development of this business.

We have been using our large LCD panel for in store promotion for three months and while it’s too soon to individual products results, there is strong anecdotal evidence that lottery products benefit from this type of promotion. People are in line, they’re reminded of a super draw or a jackpot and it’s an easy purchase at the counter whereas they have to leave the line (not that the line is that long) to grab a copy off the shelves.

We’ve embraced the LCD unit for a local focus and have included photos of employees – all to underscore our focus on customer service. We feel this is more appropriate that only using it to push product like you see at supermarkets and elsewhere. We’re going to use it for a Mother’s Day feature – if we can get some our customers to agree to having their photos taken and displayed on the screen. We don;t see this screen as being only about advertising. We’re also playing with Flash to make better use of the LCD capabilities and we expect this to improve customer engagement.