NZ Post takes on Yellow Pages

Chief executive Blair Glubb (left) and chairman Sam Knowles say businesses are looking for value in a tough climate. Photo / Sarah Ivey

State-owned New Zealand Post is to go head to head with Yellow Pages Group and Trade Me in launching a new local information service targeting small- and medium-sized businesses in Auckland.

Called "Localist", the start-up venture is being chaired by former Kiwibank boss Sam Knowles who began looking into the idea while in the role of acting chief executive of NZ Post last year.

"Clearly Post is continuing to look at what the options are. The mail business is sustainable but not a growth area. But there are significant unmet needs for small business," Knowles said.

Localist will send letters to around 30,000 businesses in Auckland this week, asking them to provide basic information for a free listing, including who they are, where they operate and contact details.

The company will then go back to the businesses in the New Year to flesh out the details with additional services for a fee.

Knowles said the information would be made available to the general public through a website, mobile phone and paper information service next year.

"What we are doing is not a traditional directory, it's better co-ordinated information," Knowles said.

The new venture comes just weeks after Yellow Pages revealed plans for a $30 million spend-up on revamping its website and print directories.

From July next year consumers can expect to see more information on opening hours, directions and parking options when they search for a business.

Despite the move by Yellow and similar information services being provided by Trade Me and Google, Knowles did not believe the market was overly crowded.

"No one is getting it together to build a better offer around customer needs. There hasn't been creativity in this space. You can't find Google at a local post shop. We are about having people in the community."

Blair Glubb, who left Yellow Pages 18 months ago, is heading up the new business as chief executive. He said it had already spent time talking to business about what they needed.

"For small businesses the challenge is around what should they do about social media - they know they need to be there but many are not sure what to do to make that happen."

Knowles said Localist would provide advertising packages tailored to individual companies but would not say how much they would cost.

"It will be a lower price than what is currently in the market, providing more for less money."

Knowles played down the challenge of attracting advertising in a tough economic environment and said companies were already paying for local advertising but were just not getting "value for money".

"That is why we feel confident it is the right time to launch - it is so tough out there they really are looking for value for money."

But he was also close-mouthed on how much NZ Post was spending on the new venture. "It's not a large sum of money for the sector," he said.

Knowles said having NZ Post as its owner allowed it to commit long-term to the venture to see it through. But he didn't expect it to take long to become profitable.

"We wouldn't expect to become profitable in the first year.

"But Kiwibank is a good example, we set down three years and did it in two - that would be my ambition."

So far the business had hired between 20 to 30 people and staff numbers were expected to remain fewer than 100.

"It's about how we leverage out of NZ Post - it's not a big investment."

Knowles said it had chosen Auckland to focus on because it represented both a third of the population and where they believed the greatest need was.

Knowles said 40 per cent of all searches by consumers were for products or services within their local suburb.

Glubb said the Auckland local advertising market was worth around $600 million a year.

Localist would also provide information services for community organisations.

LOCALIST
* A new local information service owned by NZ Post.
* Targeting advertising by small and medium-sized businesses in Auckland.
* Will provide information through the internet, on mobile and through paper directories.