Dymocks launches new education venture Potentia: Why the bookseller is making it “as difficult as possible” for new market entrants
Monday, October 1, 2018/
After nearly 150 years in the bookselling business, Australian institution Dymocks is branching out into new areas with the launch of a new education and tutoring business called Potentia.
Described as a “natural next step” for the business by managing director Steve Cox, Potentia will focus initially on the high-school tutoring space, launching with a range of programs aimed at high-school and HSC tutoring for English and Maths.
However, Cox outlines to SmartCompany a grander vision for the education business, wanting to promote a “lifelong love of learning” he says is already the core belief behind the Dymocks brand.
Potentia’s first learning hub will open in Parramatta midway through this month, but the goal for the business is to have 30 hubs opened across the next five years, with two more sites already planned before Christmas.
Right now, Potentia looks mostly towards the tutoring space, but Cox says the longer horizon for the business goes beyond just that sector of the education market.
“Obviously the education market is enormous overall, so when we had a look at the market holistically there seemed to be an opportunity in the tutoring space, which made it a good first entry point,” Cox said.
“Tutoring also aligns with a lot of what we already do with Dymocks, as a lot of customers who come into our stores come in to buy education resources. The tutoring market is also quite fragmented, and from the market research we did parents and students are looking for something different, holistic, and done by a trusted brand.”
“Longer term, we want to grow beyond tutoring,” says Cox, but is largely unclear on where the business will move next. He stresses Potentia’s overall goal is to help students get the most of out of the education experience, and says the business will look to differentiate itself from other tutoring operators by continually developing and updating the material it uses to educate students.
He also says Potentia will be investing significantly in tech development to help achieve these goals. The first handful of Potentia learning hubs will be company-owned, however, the business aims to introduce franchised stores largely in regional locations as the business becomes more established.
Dymocks seeing success in franchising
Dymocks itself has over 60 stores in Australia, and the vast majority of these are run by franchisees. The company has been largely unmarred by controversy in recent times, much unlike its franchising fellows such as Retail Food Group and Domino’s.
Cox says there’s no ‘secret sauce’ that’s made Dymocks such a successful line of franchises, saying the company’s near 150-year history has produced a “lot of learnings” on how to best approach running a nationwide business.
“A lot of different things goes towards our success. We’re very focused on the customer, and we work really hard across everything we do satisfy that customer and continue to inspire book-lovers,” he says.
“We’ve been running a franchise for decades, and over that time we’ve worked out the best way to approach it, including we engage in a positive and proactive way with all our franchises’ leadership teams.”
This involves a lot of communication, says Cox, with Dymocks using Facebook’s Workplace software to coordinate and communicate across its 60 plus stores. Franchise owners also receive summary emails of customer feedback each day, which helps them better run their stores.
Bookselling still the priority
Despite Potentia being one of Dymocks first major non-book-related ventures, Cox rejects the idea the business is moving away from its bookselling roots, saying the business continues to trade “exceptionally strongly” in the area. Though he’s tight-lipped on specifics, the managing director says the business has been experiencing strong growth across all states, saying it’s the best the business has seen in “many years”.
Cox actually views Potentia as a way to build on the core parts of Dymocks’ business, saying the tutoring side of the business will attract new customers into Dymocks stores, with students being some of the most prolific book buyers in the market.
Reflecting broadly on the book market Down Under, Cox says there’s a lot to be excited about, despite constant threats from international players such as Amazon.
“The market is expanding and changing, and with Amazon in the market now there’s a lot happening. But books are incredibly resilient. If you go back five or so years, [small business minister at the time Nick] Sherry said there would be no bookstores, and he was very much wrong,” Cox says.
“People are crying out for quality books to read, especially with the rise in awareness that everything you read online is not necessarily the best of quality, and is ultimately placed there with advertising in mind.”
“People are seeing the value in books, and that’s continuing a drive back to physical books which is stronger and more confident than ever.”
Dymocks to make it as “difficult as possible” for new entrants
With the collapse of Borders in 2011, Dymocks remains one of the last standing large-scale bookselling chains in the country, and by far the biggest. Asked if Australians could ever expect to see another successful bookstore chain such as Dymocks pop up in the future, Cox was unsure.
While there’s still a demand for books and quality bookstores, says Cox, he says Dymocks’ constant evolution and betterment of its business model means the chain is planning to make it “as difficult as possible” for anyone to knock the business off its perch.
“Ultimately, there’s enough demand from readers in Australia that there’s always an opportunity to better respond to what customers want, and there’s always the chance another business could come up to satisfy that. But that business won’t be the same as the ones around today,” he says.
“But the days of Dymocks being the same for many years on end are not around anymore. We’re continuing to invest, change, and improve our systems to make us as efficient as we possibly can.”