Our Ink and Toner promotion – 20,000 flyers in letterboxes around our centre – is generating excellent sales. The success of the promotion certainly reinforces the importance of promotion outside your four walls. The campaign has been so successful that we’re going to relay our ink offering to broaden our offering beyond what we have today:
This space is generating a better return than our more traditional stationery offering thanks to the promotion.
Many newsagents manage stationery today as it was managed by newsagents decades ago – before Officeworks, Australia Post, supermarkets and other mass merchants were in the stationery space. Newsagent suppliers also manage the channel as if time has stood still. This ignorance of today’s marketplace is both a problem and an opportunity for newsagents.
Take everyday pens and markers. Most newsagents have a good range of two brands. Many have three brands. Each is serviced by their own representative, calling on the newsagents and processing orders. These reps have one responsibility – to move stock out of their company warehouses. While most process the orders, these are ‘turned through’ newsagent warehouses with an additional cost for newsagents of between 5% and 10%.
So, we are buying badly because of a labour intensive sales process, deals add to the cost to support newsagent warehouses and newsagent time is taken dealing with reps. None of our competitors have these costs.
Smart newsagents a re tightly managing the time they give sales reps. They are also establishing direct accounts and negotiating better deals – so they can compete. This is where there is an opportunity – for entrepreneurial newsagents.
For our channel to compete in today’s marketplace it has to rid itself of practices which disadvantage us. While that will be unpalatable to longer term newsagents, suppliers and possibly industry owned warehouses, the reality is that unless we cut costs out of the supply chain we will not be able to hold our own in the stationery place.
There is a case to be made for carrying the whole range of one brand opf everyday pens and markers. This increases negotiating strength and enhances the in store story. It also cuts time with reps. So, with more time, more capital and unlocked retail space the newsagent can evolve their business to be more competitive.
Specialty paper is another ‘habit’ based product which newsagents could do well with. It fits with our demographic and lifts the look and feel of the shop. Once people have made an invitation to a party or some other event they are hooked and come back for more specialty papers and the bits and pieces needed to do the job.
This fashion related product sits well near the greeting card space – they serve customers chasing similar outcomes.
The keys with this category are to partner with a good supplier; refresh the stock regularly; display it well; and, locate it near your card space – it’s not a stationery item. Each of these ‘keys’ requires the newsagent managing, indeed driving, this part of the business. The rewards for such entrepreneurship are good.
To those who note such things, and there are plenty, for all the difficulties faced by newsagents there are opportunities which, if seized, deliver handsome rewards. This specialty paper area is one.
We’re having great success with the retail ink and toner strategy from newsXpress. The flyers we get (see below) every two months drive traffic to the shop. They’re more successful than the flyers we had before we joined newsXpress. This ink and toner offer is separate to our Inkfast online business – different range, different price points and different customers.
The newsXpress strategy is driving new customers to our retail outlet based, in part, around this flyer:
The keys for success with ink and toner for us have been getting the right range of product in store for a competitive price, professional marketing and access to good product knowledge. By packaging the buying around top brand name sellers and reflecting them in the marketing material we have been able to significantly lift the return on investment.
While we’re pushing our 20,000 personalised flyers out with the local paper, I know of others doing just as well with direct letterbox drops. I’m looking forward to the next flyer and driving this category within my business. Ink and toner customers are efficient in that more than half the time they buy other items.
Disclosure: I am a shareholder in newsXpress Pty Ltd.
It’s been a while since I have blogged about Inkfast, our online ink and toner business. Inkfast is two years old. We run it out the back of our newsagency. We advertised heavily online through Google, Yahoo and Yellow Pages online. All those campaigns are now off and have been since third quarter last year. Sales are strong with around 70% coming from existing customers and the rest from new business won through word of mouth. Most customers are corporate and most items purchased and not items we would usually carry in our newsagency. Thanks to our turning off of the expensive advertising spend, profitability is good, even with tight margins due to a very competitive marketplace.
I’d go out on a limb and claim that Inkfast is the most successful website created out of a newsagency. Traffic numbers are high and sales strong. It is bringing new customers to us, even though we never see them, every day. We transact more business in a week than we do in the stationery department of our shop in a month. This is in part due to our demographic. Being online, Inkfast is not bound by the demographic feeding our retail location.
The Inkfast experience is unlocking for us supplier rebates as well as an understanding about ink and toner which is helping us create a more successful offering in store for our retail customers.
What we are most proud of is that we created this ourselves from scratch and we rely on no one major supplier. The feeling of freedom is wonderful.
One of our suppliers sent us this cool MIO C310 satnav device as a rebate for our purchases last month. We’re using it as a prize to drive ink and toner sales. Newsagents don’t often have access to rebate products such as this from suppliers so it will be good to kick sales along and make one lucky customer very happy.
While we failed this year with a Back to School promotion in my shop, I’m hearing great stories from other newsagents like the rural NSW newsagent who increased sales 56% through great ranging and display in store, or the VIC newsagent who landed two major school deals after years bidding against massive competitors – he won on a service guarantee and a local community pitch; and the shopping centre newsagent competing with Big W et al and almost doubled sales on last year.
Back to School can be hugely successful for newsagents in an appropriate demographic. The keys from the stories I hear seem to be: be big and bold; connect with local requirements; provide expert advice and exceptional service; and, get in early. I am sure those who have actually been successful will have even better comments to make.
Stationery is one part of our businesses we control. Those of us who have failed at Back to School need to learn from the successes. Maybe the successful newsagents could create a school on Back to School.
Australia Post is running this ad on the back page of this week’s Woman’s Day.
Not content with chasing greeting card, stationery, calendar and book sales from newsagencies and other small businesses, Australia Post through its 863 government owned and operated outlets is now chasing the important Back to School market.
Government policy allows Australia Post to take revenue from small and other businesses in this way. They are trading of the highly respected postal service brand and achieving consumer interest for a fraction of what it costs businesses like newsagencies. They ignore competition policy by protecting Australia Post while also approving their targeting of newsagents through campaigns such as this one.
Every step by Australia Post into traditional newsagency space is further evidence of lack of interest by this government in small business.
While newsagents are retreating from the high street, stationery outlets are strong. Take Ryman for example. They have an excellent range, well laid out and provide a clear value proposition, a mix of price and service, to the browser. Sure they are part of a big group. It doesn’t feel like it in the store. For example, I visited at least ten WH Smith stores (newspapers, magazines, greeting cards, books and stationery) and received consistently mediocre service. The employees looked unhappy and acted unhappy. (I stood in a line for 5 minutes, got to the counter and was greeted with yes please – geez, no smile, no greeting). I visited three Ryman stores and found the opposite. Happy employees who seem to actually want to serve you.
Standing in one of the Ryman stores I got to thinking about how we do stationery in my newsagency and many of Australia’s newsagencies. At Ryman I feel better serviced through range and price. The store encourages browsing. Yet it’s small – certainly the ones I went to. Their Christmas display was bold and enjoyable. Then I think of stationery in my shop – it’s cold, unappealing and reminiscent of work. The Ryman approach makes stationery, work, enjoyable. This is what got me browsing the store. I walked out and sat in a coffee shop (drinking bad London coffee) and made notes, plenty of notes.
Many newsagents are getting stationery wrong, me included. We get it wrong on range, theatre and the value proposition. Even though stationery is one department newsagents fully control, few of us exert that control. It’s the poor cousin to newspapers, lotteries, magazines and greeting cards. In many newsagencies the range and merchandising approach has not changed in more than 20 years. We need to be proud and bold stationers. We need to leverage our geographic asset better than we do today.
These Ryman stores are a real eye-opener. They have demonstrated how to do stationery well in a small space.