Collins Booksellers diagnoses healthy returns on hospital-based store strategy

Collins Booksellers has opened a store inside a hospital as part of a new strategy, but experts say other retailers looking to follow suit must be willing to customise their store layout and stock.

Collins Booksellers, which has been operating since 1922, has opened a store at the Royal North Shore Hospital in NSW as part of a major redevelopment of the site.

It’s the first Collins Booksellers store to be located within a hospital, with more to follow across the country.

The move comes almost a year and half after Collins acquired a group of Angus & Robertson franchisees, after parent company REDgroup Retail was placed into administration.

According to Collins chief executive Daniel Jordan, the Royal North Shore Hospital site is the first location that will operate as a company store rather than a franchise store.

Jordan told StartupSmart the company began assessing the site about two years ago, suggesting it can take a long time for retailers to negotiate with hospitals.

“Obviously it’s a very different environment because you’re not dealing with [traditional] customers. There are other dynamics involved,” he says.

“There are strict controls in terms of what you can and can’t sell… Different areas can’t be used [by retailers] and not all offers are deemed suitable for a hospital environment.”

The RNSH site is the first store to feature the company’s new in-store Kobo kiosk concept, after partnering with Kobo last year. It will showcase the full range of Kobo eReaders and accessories.

As of next year, inpatients will be able to hire Kobo eReaders.

Jordan says the company is looking to roll out 20-30 stores within hospitals, which “probably need to be of a certain size in terms of the bed count”.

Having said that, Jordan says the model does have some flexibility, so the company is interested in moving into smaller hospitals as well.

According to Jason Gehrke, director of the Franchise Advisory Centre, hospitals are becoming more open to the idea of playing host to retailers.

“Hospitals have increasingly started to make retail space available to I guess improve the diversity of the facilities available to their customers,” he says.

“If you think about a café chain like Hudsons Coffee, it has grown as a result of targeting hospitals.

“The hospital retail offering is moving on from just flowers, where there were pokey little florists on the corner.

“Hospitals are places where people congregate together, and there is a retail opportunity. It’s very astute of Collins to recognise that.”

Gehrke points out most hospital-based retailers have a slightly smaller footprint than normal.

“If you’re looking to be a retailer in a hospital, you need to be prepared to customise your store layout and inventory according to your space requirements,” he says.

“I can see an entertainment-related electronic offer. There would also be scope for some more casual dining or fast food offers.”