The Co-op: from university bookshop to omnichannel retailer

Link to: The Co-op: from university bookshop to omnichannel retailer

It was the first company in Australia to sell books online. If you attended university in New South Wales or Queensland you’re probably a member. The University Co-op Bookshop was started by a group of students operating out of a garage in 1958, and now counts its membership at 1.6 million – Australia’s largest member-owned retailer. It’s also the largest campus bookseller in the country, with an annual turnover of more than $100 million.

As book retailers around the world fold one by one, it is currently undergoing a major brand relaunch, the first in its 55-year history. Product diversification, a focus on omni-channel distribution, and a wish to re-engage alumni are at the heart of the strategy, driven by burning ambition and a new executive team. And a new name: The Co-op.

Marketing caught up with Greg Smith, the Co-op’s chief marketing officer, who throughout his career has been drawn to start-up operations in large businesses. He played a lead role in setting up ANZ.com, worked at the State Bank of New South Wales in the days leading up to its purchase by Colonial, and was involved with the rebranding and transformation program of the previous six stock exchanges into the one Australian Stock Exchange.

Now, in Smith’s latest organisational transformation act, the brand has dropped the ‘university’ and ‘bookshop’ from its name. We asked him if that sums up the strategy.

Smith: No, not really. The strategy is to transform the business, and part of the transforming of the business is to add on more products and services, so hence the word bookshop wasn’t relevant anymore. Clearly books are our primary focus and function, but as we are – I’m sure you can see on the website – starting to diversify. We will then add on more and more on our focus as a multi-product company.

We are still the largest campus book reseller in the country, and our heritage has been, and will always be, universities. A core area of difference is we are located on campuses with close to 51 stores – the campuses keep growing, they grew by nine in just these last two weeks. So we’ve been very busy.

Greg Smith

Marketing: Can you give us a bit of background on the story behind the Co-op brand?

It started with a whole group of university students at Sydney University – that’s where it had its formation days, and they wanted to set up a co-operative, a not for profit that was able to source and purchase textbooks and all the relevant learning materials for students and give it to them at fair prices.

Now, that’s pretty much the same mantra we’ve maintained all this time since 55 years ago. But now, what we’re doing is we’re saying, look, students are on campuses and some of these campuses are literally the size of small townships in terms of the populate. So we are pretty much the one and only retailer on campus, and rather than being a place where you come, get your books and never return, we’re making the Co-op the point at which you come back to regularly.

That’s the whole focus behind the transformation, and so we provide products and services that you need, clearly, for university and your study, but also what you want – everything from the likes of fiction, non-fiction, now to beauty products, through to ethically developed T-shirts, a whole range of clothing… even down to technology and fast moving consumer type products. We even sell Red Bull in stores now.

Very useful to a uni student.

Extremely useful, particularly during exam times. So not only are we useful during exam times with calculators, we’re very useful with Red Bull.

What sparked the new direction in strategy?

It started with the board. The board had a bit of a re-organisation, and a realisation that the burning platform is around us, and you’re either the last man standing or you go down the same pathway as your competitors. So what we call it is a revolutionary evolution.

We are evolving rapidly, but also making some great headways, and that translated all the way through to the internal transformation of the company. Systems, processes, people, skill sets… We’ve got people in this organisation that have been with the Co-op for some 20-odd years. And that’s now balanced out by our whole new team that has come on board. The two worlds have not collided: those two worlds have actually enhanced each other. The collective knowledge of those who have been with the organisation for those 20-odd years, have now worked very well with the new teams coming in to make it all work.

As a transformation case study, there always is an area of soreness that could potentially be there, but in this instance, we’ve handled it very, very carefully along the way, and really kept our staff and our teams fully engaged with the process, and fully involved in the process.

The Co-op - new website

With the brand never having gone through a change like this before, that has to come with risks.

We realised as part of this transformation the name had to change. But you don’t change your name, you don’t change your logo until all the house is in order, and I think that’s pretty much what we’ve done. The transformation process, the systems, the people, were all engaged from the get-go, even down to how we implemented the branding change. We involved the board, we involved our staff, we focus-grouped internally to start with – our strengths, our weaknesses, what we thought our customers thought of us, how we thought the students perceived the Co-op as an entity and so on and so forth. A very high level of work went into the internal views.

Then we took a lot of those thoughts and we tested those in a very detailed series of qualitative and quantitative research. We interviewed close on about 300,000 active members that were spoken to. That’s current actives, people who have been buying over the last five, ten years, type thing. It’s was an extraordinarily high level of feedback that we received from our customers… In the quantitative research, the 25 words or less at the end to tell us what they thought, many actually took the extra time to send an email back to the address giving us their further thoughts. That was extraordinary. There’s a passion and there’s a brand heritage clearly around the Co-op. It’s the remembering of your glory days, a lot of things people still hold onto. That’s for past members.

The current members had different approaches and views, to which we’ve then melded together as part of our research. That research was then distilled into some really key messaging, and from that we then briefed a design agency called Uberbrand. They worked tirelessly with us, the senior management team and the board to rework the branding, the brand guidelines, the positioning, the brand essence, everything to the value proposition.

Before we even went to the community, we then went out there and we tested this internally. We then engaged 17 brand champions across the country and in our key influence areas within our organisation, of which we’ve got about 200-odd staff, so we brought it out to those in the stores, those who can help us influence others within the organisation. Because, when you change a brand, some people like it and some don’t. But I’m going to put my hand on my heart, and I have not received one bit of negative feedback from any of our staff, and some have been here 25 years, so you’re really messing with something that’s personal. It’s this refreshed image that we have, and everybody has got behind it.

That was the first [key], I think, to the whole brand transformation – to get the systems, processes, people in place, and then go through that market research and the internal litmus tests – put it out to the brand, develop it, get the people on side. And we’ve been communicating to our teams on an ongoing weekly basis about what’s happening in the brand space, getting feedback. I call this ‘cleaning up your house before you invite your guests in’.

And the implementation in store will all happen over these two weeks?

Over a two week period, yes. And each one changes as they roll. So today they’re known as the Co-op Bookshop, tomorrow they’ll be known as the Co-op – new look, new delivery, even down to name badges on the staff who you walk around the store with. It’s a massive change.

The Co-op - Store Reception

You mentioned the passion around the brand before, and as a member-owned brand, that makes a lot of sense. So it sounds like it should fit perfectly in a social media setting. What are the main aspects of your social strategy?

At the moment, we have currently 25 different Facebook pages, and the reason why we’ve got that, and we’re building up to probably about 40 different Facebook pages very shortly, and those build up with the campuses that we’re on. Effectively each campus is a different ecosystem, so you cannot have one particular Facebook page… we have one head page, but we’ve now established individual ecosystems, and underneath that we have social media champions working in each of our stores that volunteer. They’ve got their eyes and ears and hearts in the right place, and they’re on campus every single day, so they’re able to take photos, they’re able to write blogs, they’re able to write ideas and thoughts that come into their mind that go up onto that site. And they have what I call a content engagement rule. So that then rolls through in the team to our social manager, who has actually taken the social engagement rules and built them in a really big way that they can be replicated across different independent Facebook pages, and obviously to blend their own element of creativity and design in, but staying within the corporate guidelines.

That’s just one part of the social strategy. The second part of the social strategy is LinkedIn. You will see very, very shortly a massive LinkedIn presence from us as we touch point with our past members.

The Co-op Bookshop was the first online bookseller in Australia. When was that? And is innovation a part of the brand?

1996. Primarily text based. But this organisation, it’s innovative, and I think that’s the real key to this. I’m just about to launch a fully-integrated behavioural transactional and socially-connected trigger-based CRM, where we could be really building up a lot of connection points that we have with our members in the future.

How are you doing that? You would have the member data there, but it’s integrated socially as well?

Yes. All of the above connects together, and we’re using a company called Digital Alchemy as our partner there. Digital Alchemy also does work for NRMA, Woolworths and a few other very large brands, and we selected them as part of it because we believe in outsourcing capabilities that we don’t have. Clearly they’ve got the incredible resources and support, we use them. So our team here is very small that we use the length and breadth of their team, so whenever we expand we use their model to scale up.

What’s the HQ team size like?

The total team here on this floor is about 45, I think now. It’s incredibly small. So the support office is small but the larger store numbers is clearly where we have our footprint, is where we put most of our money, and therefore, as a not-for-profit organisation, we run it as a very tight ship, but we’re a very commercial ship. And any surpluses that we create go to giving back to the community. We actually give back many millions of dollars – last year it was close to eight million dollars, back to the student community across the country.

That’s through scholarships and supporting a number of causes?

Correct. So as I said – and I think that was one of your opening questions, this rebranding, you’ve dropped the word ‘University’ – Well, yes we have but it opens it right up because this year alone as part of our membership drive, we’ll be earning close to 100,000 new members, and that’s a pretty big call – that’s our aim, 100,000 new members. Not many businesses can say that.

We have a pretty good membership program, which we’re just about to launch, which includes a fully-fledged loyalty program and so on and so forth. It’s part of this, again, this total transformation to bring people back and to see that the Co-op has grown up just like them. And I think that’s a real key. Just like you and I, we’ve grown up since university days, our needs and wants are a bit more refined or changed slightly but there is something that appeals – we still buy books, we still buy Christmas presents, we still buy this and that, or we still want to actually learn more through our workspace – therein lies an opportunity.

What’s changing in regards to the loyalty program?

The whole member value proposition used to be purely just discounts, but what I’ve done is, with the team here, we’ve got now a multi-layer loyalty program, and that multi-layer program runs everything from cash-back offers to money-can’t-buy rewards. We’ve teamed up with some amazing partners for money-can’t-buy rewards, and we’ve teamed up with some amazing companies for ‘hot deal voucher’ type things. But not your traditional voucher vouchers, things that you can’t get anywhere else.

We’ve got that binding power of the Co-op, so to speak, that we can pull in and draw. We are a significant player in the marketplace because people already know who we are, and this gives this branding – coming all the way back to the main theme here of what we’re talking – this gives us the permission to have that other conversation. So it’s becoming a lot more commercialised, but again, still keeping the heart of the co-operative in place.

 

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