Author: Mark Fletcher

Further to my post yesterday about Tattersalls’ deal with 7-Eleven to sell lottery tickets, I have been to three 7-Eleven outlets this morning.  I can see the appeal.  In addition to usually being well located, these stores are open excellent hours, cover popular convenience focused product categories, are well lit, offer a cheerful service and are consistent across the stores.  Hang on, some of these are our assets – good convenient location, cheerful service.

The folks behind 7-Eleven have done a good job driving discipline behind their brand.  Suppliers like this.  They like that they can sign one contract and have it apply to a network of stores.  I have been told by three suppliers recently that this is what they like about 7-Eleven.

7-Eleven declared their intention against newsagents more than ten years ago in their successful efforts to break the ACCC authorisation for newsagents around newspaper and magazine overturned. Magazine publishers moved as did some of our customers.

We let 7-Eleven win ten years ago thanks to appalling leadership representing newsagents.  That loss was compounded by their being no plan B.

The Tattersalls / 7-Eleven decision announced yesterday would not have been a surprise to those representing newsagents.  I doung that they have a plan B – leaving newsagents to develop their own response.

Here are some ways newsagents could respond to this news:

• Fight for a fair magazine supply model.  Publishers and distributors cannot give one retail channel more control over supply than another as is the case today.   7-Eleven has considerably more control over its magazine range than newsagents and they leverage this well.   We need to set our terms and have the guts to adhere to these.
• Challenge Tattersalls over their dedicated area.  I am not aware of any newsagent mounting a legal challenge on this.  If we bound together and funded a well considered challenge maybe we could free up some of this golden mile real-estate in our stores for other products.
• Challenge Australia Post.  Their government owned stores directly attack newsagents.  If we do not fight they will get magazines and newspapers and, maybe, lotteries.
• Start making business decisions.  Too often I see newsagents spending too much time reacting to supplier requests (demands).  We need to spend more time being entrepreneurial.  From product ranging to marketing more of us need to exert control over our businesses.
• Stand for something.  The most successful newsagents I talk with are those who energetically pursue a point of difference for their business.  It could be stationery, gifts, cards, ink, business services, flowers – just about anything.  With so many retailers selling everything newsagents sell we have to create our own unique position.
• Compete.  Take on 7-Eleven if you have one nearby.  They do not have a monopoly on convenience retail.  If Australian coffee shops can take on Starbucks and win newsagents can take on 7-Eleven.
• Lift our game.   The worst looking newsagents pull us down.  While we cannot strip them of their shingle we can separate them from us.  This can be done by the marketing groups being stronger in their disciplines.  Smart newsagents will join groups that are focused on discipline.
• Lift our game (part 2).  This point is basic and practical and based on newsagencies I have seen in the last week: remove posters from the window, put working lights in the shop, un-clutter the counter, have good value impulse lines near the counter, get rid of stock which has not sold in six months and get staff looking decent.  None of this should have to be pitched but it does.

There are plenty of other responses. This list is designed to prompt ideas.  The key is that this announcement from Tattersalls must cause us to take some action. You can’t make money from being a passive victim.

Tattersalls has advised its Victorian outlets this afternoon that it about to sign an agreement which will see its lottery products sold in 7-Eleven stores. This is a blow for Tattersalls outlets and is sure to be felt at the cash register. Tattersalls says that they are targeting new customers in the convenience channel. The move by magazine and newspaper publishers into convenience means that this channel is seeing more and more traditional newsagency customers every week. It is a stretch for Tattersalls to say these are new customers.

The 7-Eleven move is based on technology like the Tattersalls / Bill Express integration where lottery tickets are sold using non Tattersalls hardware.  I would be curious to find out if this is an outcome from the interest 7-Eleven expressed in purchasing Bill Express when the company appointed Administrators earlier this year.

The move demonstrates that Tattersalls understands competition yet the company continues to refuse newsagents and other Tattersalls outlets to use the now useless Tattersalls scratch ticket bays.