The Australian yesterday published a story about moves US stationery giant Staples is making in Australia. Having completed their takeover of the Australian marketplace and completed research on opportunities, they have decided to start with a new online presence.
Staples has launched a local Staples website, initially targeting small to medium businesses in NSW and ACT.
This website is the first step for the Staples brand in Australia. While the Officeworks spokesperson is putting on a brave face in the article in The Australian, they would have to be concerned. Staples is a successful organisation in internationally. Their stores set the benchmark. They carry an excellent range, price competitively and – here is the kicker – they engage with small businesses in a practical and helpful way which drives loyalty. Do one of their small business workshops, once they start here, and see for yourself.
Newsagents need to develop a strategy for dealing with the opening of Staples here in Australia. I think that the channel needs a National Stationery Plan. I would see such a plan covering:
- Consistent minimum ranging.
- Consistent minimum in-store display standards.
- National pricing on key lines.
- Online training opportunities for newsagency employees.
- National advertising that Newsagents are Back In Business – a campaign which leverages our local credentials.
I know that some of these ideas will be a challenge. If newsagents don’t tackle the stationery threat / opportunity head on, we will be looking back in a few years wondering if we should have.
Outside of marketing groups and associations, newsagents need together and support a national plan to shore up current, win back old and attract new stationery business. A concerted and consistent campaign should drive double digit growth for newsagents.
The question is whether newsagents want this enough to make it happen.
At my recent Newsagency of the Future workshops around the counter I identified stationery as a renaissance category full of opportunity for newsagents. I am confident that with a strong national approach, newsagents can expect 2011 to be a great year of growth across the business by leveraging stationery as our point of difference.
Footnote. The ANF Board was close to deciding to enter into an agreement with Corporate Express (now Staples) late last year. I ran a campaign at this blog against the move. I thought any commercial relationship would be wrong because CE would use the newsagent information to compete. Time has shown that the decision to not proceed was a good one for newsagents.
I am second to the idea of newsagents joining together to compete with the big guys. However, having GNS as the supporter for newsagents and also as a hinder for newsagents, it would be very hard for us to compete with the big guys – online or offline. I am always try to support GNS as much as possible, however, the price I am getting is no way I can compete.
Apart from GNS, I see little actions from the associations.
Note that I am a member of ANF and I support GNS majority of the time (where possible).
What must we, newagents, need to do to help GNS to help us to compete? Why is GNS prices are way above what we can get from Officeworks, Woolworths, etc? The answer is keep supporting GNS is not good enough – What strategy is there, if any, for GNS to help us to compete? I see no material from GNS to promote the benefits of supporting GNS apart from words of mouth from other newsagents to tell me to support GNS.
As mentioned previously in my posts, I can get imported paper cheaper, factor in the transportation cost and costs, than that I can get at GNS. It only catch is I don’t have the warehouse space. Therefore, why is we paying so high price from GNS and still expect to compete.
Everytime, I heard the “propaganda” of supporting GNS, my blood just heat up. Do we need another GNS-like body that actually help us to compete?
I am shocked and concerned that this post gets one comment and the Darrell Lea discussion about Woolworths gets plenty. Folks this here, stationery, is a far bigger issue.
Mark, probaly goes to show that there has been no leadership shown on the Stationary issue and that agents might have put it into the too hard basket or at least the associations have maybe. I think that agents should be focusing on stationary as a priority before it becomes another lost resource to us……but as i have seen with many issues thus far, how do we get agents to act as one? We have a tremendous advantage as far as numbers go but nobody seems to be able to get everybody on the same page. Maybe it is these reasons we choose to bitch and moan about things Woolies and Co do to affect us rather than being proactive about the real issues at hand……again these are just my ramblings. Having been a publican in a previous life i am forever amazed at the lack of unity when it comes to newsagents.
Cheers
Al
I do appreciate all the associations have done for the newsagents thus far. However, I see no reason for such a delay in the unification of all the associations to become a single vocal entity that has leadership with long term strategic view. Having seperate associates mean scarce sources (time, money & labour) are thinly spread hence ineffective at getting to the desire result (stating the obvious).
On the stationery side, I am beginning to doubt the ability for newsagents to compete. For example, a ream of paper that Officeworks is selling for $4.00 and GNS is selling for just under $6.00 plus GST plus 2%. That’s the exact same item (brand, quality, etc). The same story goes for other items including inks/toners, exercise books, diaries, etc (you can list every single item under stationery and office supplies). How are we going compete if we keep on following our conscience of supporting GNS? Does this mean that newsagents have missed the boat, again?
In summary, at a macro level, as a newsagent I am unable to compete with the support I get from the associations and GNS. At the micro level, I can only compete by a friendly smile and spend time with my customers. This bring me to one fundamental and important point that non-member newsagents have on their mind – what benefits do I get by joining an association and supporting GNS.
Most of us are probably too much out of ideas within a too fragmented industry with too little gutsy leadership to recognise then demonstrate how we can be competitive in the stationery area.
Having turned over a significant part of my business to stationery where there are still excellent margins to be found I agree wholeheartedly that there is an urgent need for a National Stationery Plan and would enthusiastically embrace it but who would run it? In an industry where newsagents collectively take one for the team three times a week as the magazines pile in the door in an uncontrolled and extremely unfair manner, the concept of a Magazine Czar, who could bring the unscrupulous bastards at G&G and Network to heel, has been mooted, savaged and shot down so what sort of reception would a Stationery Czar get but that is what it would need.
When I can buy paper and other bulk stationery supplies signicantly cheaper by paying retail at Big W and the like than I can purchase from my own warehouse i.e. GNS then what hope does the industry have? There are too many vested interests in GNS to pass on to shareholders the benefits that they are reaping.
Then there is the marketing issue – marketing groups and their members in this indusry could best be described as a loose confederation of warring tribes – would the plan involve the dismantling or merging of all of the current marketing groups involved with stationery under a single Australia-wide banner – nice thought but I wouldn’t be holding my breath, particularly with franchises.
Then there is the perpetual issue of state and national associations – no doubt this bunch of no-hopers would want a slice of the action so they would represent a major impediment – members of VANA indicated rather resoundingly their views on member associations getting involved in marketing (although at least N-VANA can supply reasonably priced paper). Bottom line is that the current crop of member associations couldn’t organise sexual intercourse in a house of ill-repute but no doubt, led by the ANF, they’d want to be there!
I love the idea of a national strategy but having seen too many attempts at unity on a variety of fronts founder and die in recent times, I wonder how it can be achieved.
Robert, too often we look at paper as the starting point of any statioinery discussion. For my money, it’s the last item I would work on. We are many other more valuable points of difference.
Jim, I think this can be done outside of marketing groups and associations. The commercial structure is in GNS. I’d like to see GNS lead the opportunity.
Whenever someone talks about a national approach to newsagents I for one switch off, we never have and never will see a national approach or uniformity through all stores as we are all individually owned and that will not change. Many have talked about it over the past 25yrs but nothing happens. We can only look to improve our own stores because that is all we can change.
I am getting good returns on my stationery because I stock what my customers want and am constantly on the lookout for new ranges but I also see that what I sell is totally different to what the shop up the road sells, they are separate demographics and trying to please everyone will only leave one loser US.
I am not living in denial and I am not blind to the challenges we face moving into the future but I do not see any suppliers jumping in to give me a hand, they are also only interested in their own bottom line.
We should all be shareholders of GNS or at least we were at one point but we still pay overprice for the basic lines and also delivery fees and levies etc, sometimes it is cheaper to buy stock at officeworks and still have my margin on top without having to buy bulk and wait a days for delivery.
We promote and push stationary hard, as I know there is better profit than most other lines in our channel. We have and are still are growing our school business alot, whilst this is alot of work, this is guareenteed income. Whilst GNS serve a purpose, my dealings with them on this matter is that their thinking is old school. We are officemart members and are involved in catalogues. GNS don’t appear to like change, they would prefer to sell the same stationary as they did ten years ago. I don’t think they have adjusted with change, for example look at smiggle and kiki-k etc, thier concepts work. Whilst GNS core lines work, but as we know we have to diverisify. As for pricing we are know outsourcing more products from different company’s and dealing direct with suppliers to be competitive. GNS have the resources and buying power to make a difference but that is going to require change which has to come from the top. Now I may be speaking out of school but is everyone at the top alittle bit to comfortable.
Mark,
Maybe paper is the last thing on the stationery front to tackle. However, many businesses look at them first – I know because I was on the other side in my previous life. Paper and ink/toners are the bulk of the stationery cost for most businesses hence they would look at this first. I have two potential contracts that I could gain IF and ONLY IF I can beat the price these two middle size companies get from Officeworks – just putting these two together I could add additional $100K sale of paper and toners alone. Plus other stationery and office supply sales as well. Tell me which newsagent wouldn’t want this? However, will I able to match that offers by Officeworks? The simple answer is NO WAY IN HELL. Businesses nowaday focus on cost more than anything else.
OK, if paper and ink/toner are not the best place. How about pens, markers, pencil, rulers, calculators, sticky tapes, white out – the essential for most offices, schools and students? I can get major of these cheaper at Big-W, Woolies, etc than that I can get at GNS.
How about starting at more technology focus consumables eg. USB sticks, DVD disks, etc. Again, I can get cheaper other my local computer stores than GNS.
My point has been and seems like always will be – How are we going to compete when the prices are GNS are higher than retail prices at the major stores?
However, one credit to GNS – the diaries I get from GNS is cheaper that I can get at other major stores. But, how often someone would buy a diary? Once a year.
As an novice newsagent, I don’t know who are the shareholders of GNS and how are the purchasing done at GNS such that the price newsagents get are so high.
The more I think about GNS and its involvement, the more I blame myself for putting so much trust into GNS before I join the industry and that trust gave me a rosey picture of the industry.
Stationery such a low profit/low margin, to survive, you have to stick with high volume and large turner. Hence, the only things that have such attributes would be paper, ink/toners, pens (pencil, markers) and possibly DVDs/CDs. If you start with anything else, you will have a tough time getting your foot pass the door and survive.
At this rate, I don’t see any industry bodies will take charge in the very near future.
Robert, I didn’t mention ink. Ink IS a great place to start. I have banging on about it here, saying that it is now close to 50% of our stationery sales, that it attracts new traffic and that the margin is competitive.
Newsagents can own this space.
GNS ought to pull their finger out and review product quality and their buying. We still pay way too much.
As I’ve said here before, I am a GNS fan and cannot understand the bagging some newsagents give them.
Wake up and realise that Office Works and such regularly sell copy paper below their cost as a loss leader to gain business. If you want to compete in this area either do the same or make a miniscule profit and make up for the small difference with better service than Office Works etc. Use paper as a foot in the door if you must but it will not create profit, it will only open the door to the supply of other profitable lines. As a rule, the more of a product is consumed, the tighter the margins, hence the problem with copy paper. Inks are good business as long as the margins are in line with the industry and based on normal stationery margins.
I did the research a few years back and compared Office Works prices to my own. Half the time my standard price was cheaper. With the exception of a couple of products I could compete without too much loss of margin on the rest and only a couple of items such as copy paper were impossible to beat except as a loss leader which I won’t do.
My sales of GNS products grows year on year and the secret is to always have in demand stock on the shelves. I have not taken a backwards step in 7 years on stationery and all the time this has been with GNS as my major supplier. We can compete but remember that we run and own businesses and WE must do the work to make it happen while taking advantage of the significant promotional power of GNS.
Quality wise, all the major suppliers are available at GNS so the quality we chose is up to us. They are anything but in the cheap and nasty market.
Support initiatives such as your local newsagent online, the seasonal promotions etc with realistic margins and superior customer service and watch the sales grow.
The gospel according to me…ha ha
Brendan, I agree. GNS is newsagent owned. The best approach for newsagents is to buy more through GNS. Through this they help the organisation be better resourced to help newsagents compete.
Correction: GNS is only part owned by newsagents.
Newsagents who sell their businesses often redeem their shareholding by selling the shares back to GNS.
But whether newsagents ‘own’ GNS is irrelevant. What is relevant is whether GNS is competitive in the wholesale stationery market, and whether they provide REAL value to their loyal customers – we newsagents.
GNS have in my opinion, failed to deliver real value on three fronts:
1. they do not offer a discount on bulk quantity items (carton / pallet quantities).
2. they do not provide stock free into store (as some of their competitors do).
3. they do not share any rebates earned with newsagents or shareholders.
You can add their inflexibility with stocking exciting new products, a boring house stationery brand with Sovereign and regurgitating the same catalogue specials year on year.
With GNS having an annual turnover in excess of $116M (2009/10), we deserve a much better value proposition from them than we currently receive.
Any talk of reform in the stationery sector for newsagents MUST include specialty stationery. Newsagents can compete with Smiggle, Kikki-K et al if they develop their own quality stationery brand.
First Advantage Newsagents have created their own exciting specialty stationery under the ‘Neeto’ brand. Attractive products with great margin, and backed by a professional marketing partner to create exciting store theatre.
First Advantage control the process from design, manufacture and delivery into store. Members control the product allocation, and reorders are supplied by sales-based replenishment to reduce overstocking.
Many of these initiatives should be the central platform of any proposed ‘national strategy’ on stationery reform in the newsagency channel, otherwise we will always play second fiddle to the likes of Officeworks, Big W and others.
Disclosure: I am a director of First Advantage Newsagents Pty Ltd.
Your or your dad darren? First Advantage is his baby. He wanted to waste VANA’d money on it. Look at how much he has wrecked the VANA GNS relationship. The Tribe family is too conflicted to have a relevant opinion.
The VANA election was a referendum on First Advantage. You got hammered. I am sure that the four First Advantage newsagents will be very happy making their own stationery.
It seems many here forget that there are very different markets within the stationery category.
Supplying stationery to large corporations is different to supplying to small and medium business. Supplying to small and medium business is different to suppling home offices. And supplying home offices is different to supplying personal consumers.
Darren,
I am certainly no fan of GNS, but those three points you make are off the mark. I’ll use your numbering.
1. I am yet to meet a wholesales that offers a discount on a pallet of product. Discounts are usually negotiated through the manufacturer.
2. Stock free into store is a con. Any company that offers this simply builds the cost of freight into the price. My beef is that GNS give newsagents the option to pickup stock, when they should be setup as a delivery only warehouse.
3. Rebates? Any money GNS receives goes back into the business somehow. Whether it be reduced pricing, or subsidising marketing costs (no matter how pathetic their brochures are), or investment into the business itself.
As for the range GNS stock … Well it is appallingly incoherent and incredibly old.
Jarryd, There is a big difference as you say. The opportunity for newsagents to supply stationery for home and small office use is considerable. What should worry newsagents is that Staples is focussed on this specific marketplace as it is where margin is.
David,
please stick to debating the issues. Being personal illustrates more about your integrity than insight.
The VANA election was never about First Advantage as you say, but rather about members preference for better services over addressing current and future industry challenges.
Darren, you are delusional about the VANA election it the landslide vote was to stop the First Advantage cult from taking control of VANA. Thank God we did that. Can I get an amen? Amen!!
As for the issues, I think Mark Fletcher has articulated those well.
Darren, you are wrong.
I, like the majority of Victorian newsagents, voted to stop First Advantage from taking over VANA and then using our money to fund your marketing group at the expense of Victorian newsagents.
I understand that First Advantage only has a handful of newsagents involved. If it is so good then why haven’t more signed on?
Getting back on track – to illustrate, we’ve just invoiced one of our clients $400 (approx) on a small stationery order. We’ve made a small proft of $40 on two diaries we’ve got from GNS. We’ve made $150 profit on another product that we can not get the cheap enough price to compete with Officeworks. Instead, we went through another retailer from interstate. With that price, we can compete with Officeworks and still make a profit.
Again, I have compared the price of the inks/toners that sold at GNS and that we can get from other suppliers for our customers (businesses, not home users), we can not compete with Officeworks by going through GNS. Instead, we can only compete by by-passing GNS.
As previously mentioned, there’s no point in getting papers via GNS. Woolworths and Big W sell the same paper cheaper than GNS sell to newsagents. Yes, they may sell below cost but does that mean there’s no point for us to get into paper?
Instead of competing trying to compete with the big guys on the same paper, would it better to get cheaper brand/no-name brands?
David & Dean,
this original thread is about a national strategy for stationery. I posted that specialty stationery and private label should form part of the stategy. It is disappointing that you have attempted to politicise the discussion.
First Advantage Newsagents is a co-operative, not a marketing group, and operates under a shared services structure. FAN is focussed on addressing the key issues that beset this channel, and are developing solutions using methods learned from outside the industry for the benefit of members.
FAN’s priority is addressing the issues. We are working on solutions for newspaper delivery, stock management, IT infrastructure, business performance and others. Our members understand and embrace this strategy, and will be the benefactors once these projects are realised.
I hope that agents can now focus back on real debate on relevant topics such as the future of stationery in our channel, so we can look forward to competing in this space.
Darren what a diatribe.
You raised your little marketing group here.
FANny as I call it has no future if it is going to deliver results for others that it has delivered (not) for some already.
I agree with mark’s call for a national stationery plan and have written to GNS urging them to take on this porject working with newsagents.
Darren,
I did not make this political.
I simply responded to your comment that the VANA election was not about First Advantage.
It was about First Advantage, and the members of VANA overwhelmingly voted against First Advantage, despite strong lobbying from yourself and some others.
Boys boys boys, ignore Darren. We did during the vana election so don’t stop now. he is a joke.