Shopping around for a franchise? Check out what’s in store in the books and gift marketplace.

We live in interesting times. On the one hand, it’s impossible to ignore the impact of online trading on the retail scene, so savvy franchisors are harnessing e-retail to benefit their business. On the other, some franchise systems are turning to kiosks and stores to broaden their business opportunities.

Dymocks

When Dymocks began selling books life was very different to today’s multimedia world. In 1879 the bookseller started up as a family business, and despite its growth and expansion into other categories as a group, remains family-owned.

The chain embraced the franchising model in 1986 and now operates a multi-channel strategy for franchisees. This includes monthly promotion packs and a dedicated marketing department which manages the brand’s media presence across catalogues, e-mails, radio, press and TV advertising.

Although franchisees have the opportunity to cater for their local customers when it comes to book purchasing, a group buying team is the starting point. The team’s goal is to leverage its buying power to ensure profitable sales for franchisee businesses in all categories.

So what’s selling? Sophie Higgins, senior category manager for Dymocks, says the power of cinema is reaching the book world with movie link-ins proving successful right now, especially the two for $30 promotions. “We have three tie-ins in the top 10,” she explains.

Fantasy is another growing category, with sales up 10 percent year on year, and cooking another hot seller. In some cases unit prices are down, but volume sales are positive, says Higgins. Readers are still keen to buy books, whether that’s in-store or online.

“We’re undergoing a lot of changes. We opened five stores last year and have plans for new store layouts that will integrate e-reading and a total website relaunch.”

The George Street, Sydney outlet is the site of the pilot Lonely Planet Hub, the first such shop-in-shop for the travel guide brand. While the focus remains on the printed word, in time additional branded merchandise will be on the shelves – DVDs for instance.

This Lonely Planet shop is a partnership with BBC Worldwide, and may be taken up by other stores around the country.

While the footprint of the stores can vary considerably, if franchisees are keen on highlighting a particular book category, Dymocks will work with them to make the most of the area.

“We’ll take certain genres that we do well in and make them more fun and interactive. It can be as simple as rainbow signage in the kids area – it’s not new, but it’s effective – or highlighting Dr Seuss or Spot books,” explains Higgins.

New look layouts will also embrace e-reading as part of the business. Dymocks was first to get e-reading pods into book stores but may have been ahead of itself. “We sell e-books but it’s not integrated. We need to represent e-retailing in store,” says Higgins.

At retail, there is an integrated Point of Sale system that interacts with the company website which helps drive customers into bricks and mortar stores with its “know before you go” function. This polls the store stock levels to inform customers of book availability at an individual store.

The chain offers customers a loyalty system, and to date this has attracted more than 811,000 members around the world. Targeted email campaigns and a monthly catalogue keep these reading consumers up to date with Dymocks’ latest offers. Social media is used to keep the customers engaged, and the brand awareness at a high level.

Higgins believes the loyalty program is a distinct benefit for Dymocks franchisees. “The booklover program probably separates us from the pack. The level of offers, how we can talk to them [members]; people give us great feedback,” she says.

Half of the customers visiting a store know exactly what they want to purchase, the other half come in and talk to the staff members before choosing a book. “A lot of people choose a book by its covers,” Higgins reveals. “A book is quite an aesthetic purchase. It speaks to people. It’s about getting more people reading.”

When it comes to running the business, there is support from a regional business manager who is responsible for the development and implementation of strategies, processes, procedures and business plans that improve the profitability of each store. The manager will work with the franchisee to focus on customer service, manage sales and profit, and develop local area marketing programs.

COLLINS BOOKSELLERS

Collins Booksellers began operations in 1922 as a newsagency in Collins Street Melbourne and launched into franchising in the 1970s with a particular emphasis on expanding into viable regional and metro high street locations.

Today, the company is wholly owned by the franchisees. In 2005 the franchisees bought the company from the administrator of the previous business. Company owned stores and smaller, unprofitable outlets were closed. Other stores and outlets have since been added to the network across the country.

In 2011 Collins Booksellers reached agreement to partner with Kobo, a global leader in eReading with more than 4.3 million users in over 100 countries worldwide, to deliver eReading to their customers. Collins Booksellers’ partnership with Kobo enables its franchisees to grow their business and meet the growing e-book needs of their customers says Daniel Jordon, CEO, Collins Booksellers.

In a first for franchise book retailing, Collins franchisees receive a percentage revenue share of online sales from assigned store territories and a revenue share of eBooks purchased online.

The company has signaled its intentions to enter new channels, recently opening its first hospital bookstore within the redeveloped Royal North Shore Hospital in Sydney. This is the first of a number of new Collins stores set to open in other major hospitals nationwide.

Expansion of the franchise network continues and a number of new retail projects to be launched in 2013 will be announced in coming months.

Lollypotz

Lollypotz is a company with a distinct offer: chocolate bouquets for all manner of occasions. The business began in 2002 by Louise Curtis, a former Telstra Woman of the Year businesswoman. Her experience in the online hamper market convinced her of the opportunities for the new business, and there are now franchisees across the country.

As the company has grown, it has broadened its offer to include retail outlets. Franchisees now can work from a kiosk, a shop or from home, and the investment varies accordingly.

Traditionally the Lollypotz business is more focused on the corporate client, although it is driven by a central call centre and website. Corporate clients account for about 45 percent of business, 30 percent is sourced online, and the remaining 25 percent comes from sales in retail or pop up shops.

Curtis says “This year Lollypotz has made a significant investment in SEO and social media marketing and focused its growth on the back of this strategy. Although the business doesn’t rely on social media marketing to drive sales, we believe that communication with our customers through social media is vital, and keeps our product front of mind with the consumer.”

The investment has brought a boost to business already – Valentine’s Day sales were up 43 percent on 2012 figures – and Curtis suggests the ratio of sales from corporate/internet clients may well change.