A blog on issues affecting Australia's newsagents, media and small business generally. More ...

Competition

Does this banana represents the difference between small and big business?

c-banCheck out the packaging of bananas at a Starbucks outlet I visited recently. I was surprised to see bananas packaged like this. But thinking about it, it’s the type of packaging I’d expect from a corporate business withers it is less about the product and more abut the packaging and how it serves the needs of the business.

If I owned a coffee shop near to this Starbucks and sold bananas I’d have ben, un-bagged, in a bowl at the counter.

This is something we need to think more about as newsagents – not how we package and sell bananas but how we can differentiate ourselves from the supermarkets, convenience stores and petrol outlets that are targeting more of what we do in our newsagencies.  These national businesses are all about the supply chain – streamlining processes, cutting costs and maximising profits. For many newsagents the business focus is different.

My suggestion to newsagents is to look carefully at where these major retailers are competing with you and to find ways to speaks with your own voice through your product mix and how you represent the products.

It feels odd seeing bananas bagged as I did at Starbucks. The packaging is another step away from the natural product.

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Competition

Officeworks price gouging on tape?

officeworks-expensiveOfficeworks sells this Sellotape roll for $7.86.  We have it in our newsagency, near two Officeworks locations, for $5.99. We use a convenience pricing model for stationery.  Our buy price is $1.99 ex GST. I’d expect Officeworks to pay less.

I think this is a rip-off by Officeworks. The company spends heavily promoting that their prices are low and they won’t be beaten on price – yet they fail to ensure this is the case.

$7.86 for this roll of tape is a rip-off. It shows why people should not shop at Officeworks.

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Competition

Finance Minister makes case for selling government owned Australia Post retail outlets

At his press conference on Sunday announcing the privatisation of Medicare, Finance Minister Mathias Cormann made the case for privatising the government owned and protected Australia Post retail outlets.

There is absolutely no good reason for the Federal Government to own a private health insurance business today. Medibank Private is a commercial business, operating in a well-functioning, well-regulated competitive market with 34 private health funds. There is no reason as to why the Government should be involved in that commercial, competitive market. Furthermore, by selling Medibank Private we will remove the current conflict which the Federal Government has by being both the regulator and the largest market participant.

The justification used for privatising Medicare applies 100% to the Australia Post corporate store network: these are commercial businesses operating in a well-functioning, well-regulated competitive market. The government is the regulator and the operator.

The only difference between the Medicare situation and Australia Post corporate store situation is the size of the competitors. Medicare’s competitors are big businesses whereas Australia Post’s competitors are small businesses, like newsagents.

If this government was fair dinkum about competition, government ownership of businesses and small business it would sell off Australia Post owned retail stores. Further, it would sell them to small business operators as part of a strengthening of the franchised network trading under the Australia Post name. This would end government owned retail outlets from competing with small businesses.

Further on in the press conference the Finance Minister is clear about the privatisation case:

REPORTER: What do you say to policyholders, particularly older Australians, who specifically joined Medibank Private because it was Government-owned. I spoke to one this morning and he was pretty annoyed, he did join because it was Government-owned and he was pretty upset.

MATHIAS CORMANN: The Government has made a judgement that in 2014 it was no longer appropriate for the Government to run a private health insurance business.  Private health insurance is a very well functioning competitive market which is well regulated. There is no public policy reason for the Government to continue to be involved in this market. We believe that on behalf of taxpayers that the capital that is currently tied up in Medibank Private can be used better. Furthermore, I would say to the member of Medibank that you spoke to, that he or she will be able to have access to at least the same level of services into the future if not better because in our view without public ownership, without the restrictions that public ownership brings with it, Medibank Private will be able to go to another level.

Australians would be better served with locals awning and operating Australia Post shops and these being on a fairer competitive footing than the government owned outlets today.

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Australia Post

Magazine publishers: are you happy with this retail display?

supermagsHey magazine publishers, are you happy with this display of magazines that I saw in a supermarket at the weekend?

Even if fully stocked this display would look scruffy with the covers hard to read. The display does nothing to support the products in a way that I’d call respectful of the product. There is a problem with the design.

The continued poor management of magazine supply to the newsagency channel risks more displays like this in supermarkets as unfair paternalistic behaviour encourages newsagents to further reduce their commitment to what should be an important channel for newsagents.

Magazine publishers and their distributors can affect change in the decisions newsagents make about magazines. That they are not doing this makes me wonder if they do want the supermarket share of magazine sales to increase.

The photo was taken in a mid-size regional supermarket. While it is not representative of what you see in major city and suburban supermarkets, it does reflect a magazine model a particular group has settled on for their model.

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Competition

Insight into WH Smith growth expectations

The Guardian has published a report on WH Smith which includes analysis from Barclays. Included is this about their international business:

For International, we estimate that the division will generate around £2m of earnings in 2014. However, with 118 stores now open we believe that earnings will grow to £9m by 2017 as store productivity builds and 30-40 new stores are added each year.

There continues to be plenty of chatter here in Australia that WH Smith will soon have more acquisitions under its belt.

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Competition

Coles offering iTunes vouchers at 30% off

coles30offitunesColes is offering 30% off the price of iTunes cards in return for a $50 grocery spend.

This is another example of one of the supermarket duopoly getting favoured treatment for a product which other retailers sell more of.

Shame on the parties involved in allowing Coles to have this offer as it only serves to make the duopoly stronger and thereby stifle competition.

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Competition

Australia Post shows why we’d be wasting money on over the counter bill payment

Australia Post has been doing more clever stuff as it recasts its business with a stronger digital focus. The latest announcement – about its digital mailbox – further demonstrates why newsagents who want an over the counter bill payment solution for the channel are out of date in their thinking. That ship sailed years ago and here’s how Australia Post is focused on a more mobile and digital future:

Australia Post opens up its MyPost Digital Mailbox to Android smartphone users

With more Australians wanting greater convenience and choice when it comes to mail delivery, Australia Post has launched the beta release of MyPost Digital Mailbox for Android devices to the public. The Android App is available now at https://play.google.com/store?hl=en (search for MyPost Digital Mailbox). And Australia Post invites user feedback at apdm.consumer@gmail.com.

It joins the Apple iPhone App and of course the laptop or desktop options of accessing your MyPost Digital Mailbox. Whichever way you access it, MyPost Digital Mailbox gives you the power to receive and pay most bills and store important documents securely online, all in one place.

Organisations like Telstra and AMP, utilities that include Sydney Water, Goulburn Valley Water and Shoalhaven Water, myGov, and local councils across the country, are choosing to use the MyPost Digital Mailbox as a billing and statement service.

The online free storage also lets you keep records that you might need for tax or when you are travelling, and lets you manage important paperwork securely and much more efficiently. By putting all your important paperwork in one secure place that you can access anytime, anyplace where there’s an Internet connection, you can streamline the process of managing an important part of your life, at the same time freeing time to do other things

To find out more and to open your free MyPost Digital Mailbox from Australia Post, visit digitalmailbox.com.au.

Sure I have issues with Australia Post – in particular their government owned stores that continue to compete with small business newsagencies. Outside of that though, kudos to them for their work in recasting their business model.

Newsagents who want a bill payment solution to offer through our channel should spend their free time wishing for something more relevant to today.

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Australia Post

Coles carefully selects words to guide how you view the experience

If you have used a self service checkout at a Coles supermarket recently you would have heard the voice from the machine welcome you to Coles assisted checkout and at the end say Thank you for using Coles assisted checkout.

The only assistance I have seen is if something goes wrong. You then wait, and other wait, for a Coles staffer to fix the problem. No, you scan your own items, bag them, feed in your payment and collect your change. These self service check outs are about Coles offering less service, less assistance rather than more.

The only explanation I can come up with for Coles using the term assisted checkout is that they want you to think of it that way – that they are assisting you. They are trying to tell you that this is them helping you when the actual experience is you helping them reduce labour costs.

Calling it a Coles assisted checkout is nonsense.

A Coles I visit regularly to check magazines has replaced six full service lanes with these self service check outs, leaving them with two full service lanes. While some customers happily use the self serve checkouts, many do have problems. You can see the look of frustration on their faces.

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Competition

Coles Goondiwindi breaches magazine on-sale obligations

The issue of The Australian Women’s Weekly due on sale tomorrow is already being sold at Coles Express Goondwindi this morning. If a newsagent did this they would be failed for selling a title before the on-sale. It’s frustrating that Coles appears to be getting away with this.

UPDATE: still on display at 4:15pm today – after both Gotch and Network were involved.

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Competition

Dreadful promotion of homes+ by Coles

coleshomesplusBauer Media better not be paying Coles a premium to promote the launch issue of homes+ magazine. On the weekend I noticed this floor display unit placed at the checkout which is locked and used a clutter storage space in a busy inner city Coles location. It’s probably the worst location in this particular Coles supermarket.

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Competition

Excellent article in The Monthly on Australia’s supermarket duopoly

Every newsagent in Australia ought to read Supermarket Monsters by Malcolm Knox in the latest issue of The Monthly.

The article goes to the heart of our mission of newsagents – to stop supermarkets taking our retail channel in their quest to gobble up independent retailers in Australia.

Once you’s read the article, share it with your staff. Put a copy on your noticeboard to remind you of your mission.

This article is an excellent example of why The Monthly is an important publication in Australia. It covers issues in a depth and clarity about which Australians need to know.

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Competition

A look at UK supermarkets

UK Channel 4 current affairs Dispatches program is running a fascinating series on UK supermarkets which I highly recommend.

I could not see it on any Australian Tv schedule so I downloaded it through EZTV. The program is interesting as it gives some hope to the power of the major supermarket groups.  This is relevant in Australia because we are in the middle of cycle of management in our supermarket duopoly that has been driven by UK supermarket experts.

There are other episodes in the series on supermarkets – they look equally fascinating.

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Competition

Bauer exclusive cookbook for Coles

bauercolesmagsI have noticed this Cakes cookbook in Coles supermarkets – offered free when purchasing Allens candy. It’s an exclusive line by Coles, one which I suspect has been driven by Allens with them using the Bauer custom publishing service. It must be a national promotion as I’ve seen it in Perth and Melbourne.

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Competition

Bauer speaks out on Coles magazine discount

Julie Green, National Channel Manager – Newsagents, at Bauer Media has issues a statement about Coles discounting Woman’s Day today in Victoria:

It has been brought to our attention that Coles has made the decision to discount this week’s current edition of Woman’s Day to $2.10 in their Victorian stores.

Bauer Media would like to state categorically that it does not support this decision and is not funding this promotion in any way.

Our extensive research has clearly demonstrated that discount price promotions of this nature do not perform positively both in terms of sale numbers or brand equity. The magazine category within a grocery outlet serves as an impulse sale which in turn builds baskets. They are not discount sensitive. Our strategy for magazines continues to be to add value to the purchase, not discount the product. We have spent considerable time, effort and resourcing to launch the Reader Rewards magazine loyalty program for newsagents that meets this strategy. The investment is substantial and ongoing. To then have this inappropriate activity happen in an alternative channel is extremely disappointing and frustrating.

We strongly urge those newsagents with Reader Rewards to exploit this competitive advantage. An issue of a magazine can be sold only once – claim the sale of Woman’s Day early by leveraging the reward of a free magazine with shoppers. Reader Rewards provides a key point of difference that will build customer traffic, loyalty and repeat purchase that will outlast and outperform this singular promotion.

It’s terrific to see Bauer being so clear on this issue.

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Competition

Jamie’s cheap plush @ Woolworths

jamiescheapplushAs part of the Jamie’s garden feature at Woolworths is this range of cheap plush being pitched near checkout counters. This plush is of the same quality as $3.00 plush items I have seen in in deep discount stores. At Woolworths it’s priced at $5.00. To me, the price seems high for the quality of what you get.

These gripes from a retail competitor aside, it’s a very clever and well thought out integrated campaign from Woolworths. They have a world renowned celebrity chef running a healthy eating campaign that has plants, plush, books and food being promoted. It’s this broad base across multiple departments that makes it an interesting campaign to watch. Very clever by Woolworths.

As for the plush, a couple of stands I looked at were almost empty so I guess people are buying these things.

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Competition

Woolworths exclusive magazine promotion

ww-magdispCheck out the stand pitching an Exclusive competition being run in Woolworths supermarkets by Bauer at the moment.

The Woolworths in Sydney where I first saw the stand had two of these in their magazine department and a smaller stand elsewhere in the store.

Customers need purchase one title to enter. More than $100,000 worth of prizes are on offer.

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Competition

Coles magazine display unit funded by suppliers?

colesmagsIn an inner-suburban Coles last night I noticed this display unit placed in the entrance, just after where shoppers pick up baskets – near the self checkout area. Behind the magazines on two sides were stickers indicating title placement.

Given how supermarkets manage floorspace I suspect Coles is being paid for the floorspace taken by this unit – unless this is a trial in which case I expect they would be paid if it moves to wider roll out.

The challenge with this unit will be in keeping it stocked and products in the right location. I checked each pocket and outside of the newspapers only five pockets had the right title in the right location.

This unit is the third location for magazines in this supermarket.

I am not complaining about the unit as I don’t want something this size. However, I do think it is smart to have major magazine titles and newspapers together in a cohesive and easy to maintain front of store offer like this.

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Competition

Officeworks is not cheap for ink or stationery

oworksI posted an update on Linked In connecting to my blog post yesterday about Officeworks price comparing ink. Almost straight away an ad on my Linked In page appeared for Officeworks. Creepy. Then I read the ad – 20 years of helping businesses grow. Yeah. 20 years of trying to take business from small business newsagents using clever advertising that makes Officeworks look like it has good prices when it waits for others to pitch on price and all Officeworks does is says ME TOO!

I think Officeworks is lazy when it comes to advertising. They know people are price sensitive and will buy from where they think they will get the best price. They also know there is a difference between someone thinking they will get a good price and them actually checking to ensure that they really do get a good price.

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Competition

Officeworks calls the newsagency to check ink prices

officeworkspricecheckSomeone from the local Officeworks called my newsagency Saturday morning to price check a couple of ink cartridges. They said they had a customer there who buys ink from us and Officeworks wanted to price check because of their cheapest prices guarantee.

I was shocked when I heard the story from a team member who mentioned in passing.  I was more shocked, however, when the team  member told me they gave Officeworks our prices! They won’t do that again now they realise what happened. I have ensured we have a policy that all team members are aware of regarding price checking now.

But back to Officeworks. talk about lazy marketing. They don’t advertise the lowest prices, just that they will undercut anyone else. Our small business newsagency goes out there with genuinely competitive ink prices, generating good interest and Officeworks stands on the sidelines saying they will beat our low prices – if customers ask.

I bet most Officeworks customers do not ask to compare prices.

It is cheaper for Officeworks to spend big on general advertising of beating prices than advertising genuinely low prices. I think they do this because they think shoppers are suckers when it comes to pricing and that they will think because Officeworks advertises the price comparison they must have good prices to start with.

Officeworks is expensive for ink! I think their calling businesses like newsagencies to price compare is unethical.

This experience makes me want to work smarter and harder competing with Officeworks.

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Competition

Sunday newsagency marketing tip: find out who has the best handwriting

Between now and Father’s Day in September we have no major retail season. While some will have mid year and stock take sales, they are not as strong as Mother’s Day, Valentine’s Day and the like. So, here is an idea for creating more traffic just for your business.

Run a competition looking for the person in your town, village, shopping centre or area with the best handwriting. Create an entry form on to which an entrant writes something abut themselves and what they like about handwriting.

Run the competition for a month. Put the entries on show somewhere in the shop (but hide entrant names) and get your customers to vote.

Where you place the entries on show promote writing pads, envelopes, pens and markers. Don’t be afraid to create a commercial connection with the competition. Make sure your logo and address are prominent on entry forms.

To extend the reach of the competition, circulate entry forms to local schools, retirement villages and community groups.

You could consider a variation by having entrants write something about your local area. Another option could be that you have prizes for different age brackets. Play with it appropriately for your situation.

I am suggesting a month to give the competition time to take hold and for you to get entries up so that interest builds.

The goal here is for you to do something different that those competing with you i the stationery space would not do.

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Competition

Understanding the new competitor: WH Smith

whsmelbairpWH Smith is expanding its newsagency footprint on several fronts in Australia including opening what look like more traditional newsagency businesses. This photo os from the WH Smith at Melbourne airport – before customs in the international terminal.

This WH Smith store is a traditional large-format WH Smith transit store. What you see is an excellent range of products in a well laid out shop, good signage and plenty of product deals.

In the newsagency space WH Smith has transit shops and high street shops. The two are different in focus but operate under a consistent brand.

Given the expansion of WH Smith branded stores, their launch of Zoodle and their reported takeover of Wild Cards and Gifts, WH Smith is a competitor on Australian soil, a competitor we have to take seriously.

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Competition

Cotton On’s Typo embraces Halloween

Check out the display promoting halloween product at a Typo (owned by Cotton On) store I saw in Brisbane two days ago. They only had limited stock left but the range was still good. Halloween has been picked up by more Aussie retailers this year than ever.

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Competition

Welcoming another competitor

dicksmithA few years ago Dick Smith opened a new store opposite my newsagency in Forest Hill in Victoria. They knocked us around in the ink space. It hurt. We eventually climbed back by focusing on brands, top selling inks and excellent service. We once again did well out of ink.

We just found out that a new Dick Smith store is to open right next to another newsagency I own. It’s replacing a low-traffic entrance of a large pharmacy. The pharmacy was L-shaped and 75% or more of their traffic used the entrance away from us.

I’m glad Dick Smith is opening here. The shop will bring welcome new traffic to our part of the centre. While there will be a challenge with ink, the traffic boost will more than compensate for this. The competition will be good for us.

We expect to see a boost across all departments as a result of the additional traffic. We will leverage this by adjusting our front of store pitch to try and connect with who we expect the Dick Smith shopper to be.

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Competition

Happy Lab is an interesting model

If you get a chance to see a Happy Lab store it’s worth it as it shows how colour blocking and creative packaging can get people spending more on an everyday item than they otherwise might. It’s Smiggle for candy and chocolate lovers.  Take the easter chocolates in the photo. At Happy Lab the price is close to three items I’d pay for a similar item elsewhere. However, the packaging and display are stunning, making it easier for shoppers to spend the higher amount. This is the Smiggle model with what I consider to be overpriced stationery for kids. Make something fashionable and people want it without worrying as much about price.

Another point about Happy Lab – I love their name as it’s, well, happy. Happy sells as I mentioned a few months ago about coke.

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Colour blocking
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