Month: November 2008

As part of their Climate Smart program the Queensland Government ran a giveaway through the Sunday Mail newspaper yesterday – buy the newspaper, clip the coupon and take it to a participating newsagent for two free energy saving light bulbs. The promotion ran off the rails when newsagents did not receive enough globes. I have head from several newsagents in Queensland who did not receive any globes at all. Newsagents will know that when you can’t honor a promotion like this the customer blames you. So thanks to either the Queensland Government or the folks at the Courier Mail this promotion made newsagents look bad.

But, wait, there’s more. Queensland Premier Anna Bligh told people last night that if they could not get the energy saving bulbs they could go to Australia Post where they have plenty of stock. Thanks Anna – you have effectively blamed newsagents for the light bulb undersupply. If newsagents had been supplied sufficient stock in the first place Anna would not have had reason to endorse Australia Post.

Anna Bligh owes newsagents an apology. What a mess!

A government concerned about small business would not have given a big business competitor like Australia Post suich a free kick against newsagents as has happened in Queensland.

UPDATE: Part of the supply problem appears to relate to some newsagents (sub agents actually) not being given any stock.  Here in Victoria publishers tend to supply promotional materials direct to all retail outlets regardless of the newspaper supply model.

Promotions are only good if they are popular and build customer.  Customer loyalty to some newsagencies has been hurt by this promotion.

I wonder about the real value of deals with superbrands such as Coke and Cadbury for newsagents.  While I accept that their products are important for many newsagents, the nature of our channel is such that we can never compete with the naional retailers.  We do not buy nationally, we do not deliver in-store space at a consistent location and to a consistent level, we do not price nationally (or regionally) and, we are not loyal nationally.

Companies like Coke and Cadbury want to be in newsagencies because we play a role in their retail strategy and while they will make offers from time to time, these offers never equal those made to majors such as Coles and Woolworths.  This means we cannot compete on price yet it is around brands such as these that the supermarkets position themselves on price and we get known as being expensive.

There is nothing wrong with being expensive if we demonstrate a reason for that – such as convenience.  However, most of us do not play the convenience card.

I think many of us could be better off finding alternative products which do not facilitate easy price comparison.  For example, instead of Cadbury confectionery, hunt down a local supplier or a boutique brand.  Sure this will not match the chocolate bars and the like – do your research and see what is selling.  Then make the assessment as to whether replacing a national brand on which you are price compared with a lesser known brand which provides better margin.

By playing in the big brand space you get the price deals when it suits them.  Newsagents will always be the poor cousins in this mix despite what the brands will say.  The same happens in liquor – the majors get the deals and the independents are the poor cousins.

I have seen some newsagents take this route with great success.

The fewer opportunities for comparing our offer to others the more we control our business and the greater the opprortunity for our success.