Developing a nationwide wholesaling solution for the office products channel in Australia has presented a number of challenges over the years; one only has to think back to the short-lived Appaloosa initiative a few years ago. However, one constant on the national wholesaling scene has been GNS, a 40-year-old newsagent-owned distributor which has essentially serviced Australia’s network of about 4,000 newsagents.
Newsagency sector challenges
The newsagency sector has been facing challenges of its own recently: the growth of digital publishing, big-box retail, lottery and gaming deregulation and migration to the internet, rent increases from landlords and changing customer buying behaviours are just some of the factors that are putting significant pressure on this channel. Most newsagencies are owner-operated with long trading hours and a convenience factor that used to be valued by consumers, but is less relevant by today’s standards.
This secular contraction in the newsagency channel has led to GNS looking to other areas in which to grow sales and a natural adjacency has been office supplies resellers.
About three years ago GNS signed a preferred wholesaler agreement with dealer group Office Choice and just a couple of months ago announced a strategic alliance with leading Australian vendor Pelikan Artline. This latest agreement sees GNS becoming the preferred wholesaler of the entire Pelikan Artline range to the office products sector.
“The objective of this alliance is to ultimately reduce supply chain costs for the dealer community, while providing an enlarged range of market-leading brands,” said Pelikan Artline Managing Director Bruce Haynes. “The combination of the distribution strength of GNS and Pelikan Artline will deliver an improved sourcing model for the office products dealers of Australia, full of choice and convenience.”
GNS CEO Alex Stewart added: “We will broaden our product range to meet the Pelikan Artline range where it makes sense, and be able to offer relative pricing to customers with – in most cases – less than the minimum order values and quantities they would have from Pelikan Artline direct.
“This gives the customer greater flexibility in managing stock, maximises their credit facilities and allows the customer to aggregate purchases from GNS from many suppliers including Pelikan Artline. This is a great example of a strategic relationship that is in the best interests of the channel. We are forging alternative means for the channel to leverage suppliers in new and different ways to create bottom-line results.”
Stewart – who headed up Corporate Express Australia’s wholesaling business before taking on the CEO role at GNS about two and a half years ago – has been implementing something of a transformation at GNS. The wholesaler was effectively running as four separate operations (Sydney, Melbourne, Brisbane and Perth) trading with the same name. He has removed the state management function and now each location runs as a sales and operations business with all shared services now centralised.
“We had a longstanding culture of an expectation that our customers had to deal with us because we were industry-owned and not because they chose to,” Stewart told OPI. “I learned very quickly that choice is out there and was being exercised daily.”
With his leadership team, Stewart has been changing the culture of the company, creating a vision for the business, opening up communication, changing the corporate identity and introducing fundamental management best practices.
GNS is also upping its service levels to cater for the needs of office resellers and to provide a point of difference. A drop-ship service is currently being tested, systems are being introduced to allow order cut-off times up to 5.30 pm for next-morning delivery, while same-day delivery is already offered in three states.
“For OP resellers we are increasing our range to include the most relevant categories where we can add value through an aggregation model. Quite a considerable component of our range is linked to our customers’ commercial catalogue strategy,” added Stewart, citing catering, jan/san, furniture and fashion stationery as recent additions to the GNS portfolio.
B2B growing from small base
The commercial channel now represents about 20% of GNS’s total sales of A$100 million (US$94 million), but is “growing from a low base”. It’s where Stewart sees the wholesaler’s key growth coming from. If GNS can ink more deals along the lines of the recent Pelikan Artline agreement, then perhaps a sustainable, large-scale OP wholesale solution for the Australian market is not that far away.