Facts & figures

The business of marketing specialist magazines to the newstrade has seen some phenomenal change over the last ten years. Whilst to the consumer there is little apparent difference as to how magazines arrive on newsstands, the decision-making and work that the various elements of the supply chain goes through to achieve this has changed significantly. A great deal of these changes have resulted from the growing use of information technology.

So, what actually are the demands of marketing specialist magazines in today’s retail and wholesale environment and how can technology help?

The biggest change has come from the sheer amount of data available to the industry. This has posed the challenges, but has also provided the solutions.

The idea of knowing where every copy goes and is bought was a distant pipe dream for publishers just a few years ago. Yet today this is a reality. Not only that, but publishers know exactly what type of stores are selling those copies, what size those stores are and their location.

This has revolutionised newstrade marketing. And it has brought a mass of benefits to distributors and publishers – retail compliance is measurable, promotions can be more targeted and trends can be micro-managed.

However, it also means there is no hiding place. Sales figures do not lie and retailers are very quick to chop and change their ranges in reaction to sales performance. And with competition from other media getting ever stronger and shelf space on the high street being squeezed in favour of higher margin products, it is imperative that publishers can react quickly and correctly to the opportunities and threats that lie in their path. To do this they (or their distributor) need access to the right data at the right time. But more importantly, they need to be able to interpret that data to create useable marketing information and then communicate it in an effective manner.

With access to this information, the reward to the specialist publisher is to enable them to compete on a level playing field with their larger competitors. One characteristic of the information age is that size is no longer the significant influence that it once was, in being able to communicate with an audience. Specialist publishers and distributors can interact as effectively with retailers and wholesalers without having to throw a huge amount of resource at it. And the sales and marketing process has become more about producing credible facts and arguments and less about writing fat cheques (though that still exists!)

The data

The key source of data in the trade is known as Box Level Data (BLD) and it comes from the wholesalers’ transactional invoice data with their retailers. Obviously this data has always existed in some form, but it wasn’t until the advent of broadband that it could be easily transmitted to distributors and publishers. The falling cost of data storage also meant that distributors could realistically hold onto this data and do something with it. For just one weekly magazine there can be millions of individual sales data records per year, so across a whole portfolio, the volume of data is enormous. The challenge is to have a system that can hold onto the data and access it at a moment’s notice.

How can this data help? Here are several areas of copy management that the publisher should focus on:

Retailer range compliance

With hard ranging becoming more commonplace, retail compliance is an absolutely vital ingredient in maximising sales for the specialist magazine. With ranges of many retailers shrinking, it is more important than ever that every available piece of shelf space in every single shop is utilised to the max.

So how can this be achieved? Retail level data is the key. Whether this comes from EPoS, Box Level Data or through wholesale data portals such as WHSN Inf-Use, Menzies Info-View or Dawsons DNX, the publisher or distributor needs access to reports or systems that can tell them exactly how many stores of a particular grade a wholesaler should be supplying. The next challenge is to then translate this information into an allocation that can be communicated to wholesalers clearly and effectively.

Over the years, retail compliance for both display promotions and ranged issues has been a real bugbear for the industry. As much of this has been caused by the wholesaler being starved of copy by the publisher as it has by retailers returning copy early. Understanding how many copies retailers need to take for particular promotions and giving wholesalers access to that copy is the first and biggest step to achieving good compliance. This sounds obvious and easy, but, in my experience, one of the biggest eye openers to publishers since the introduction of box level allocations has been how much a retail scheme can add to the print order. Supermarkets, in particular, have the potential to sell huge numbers of copies, by virtue of their high footfall. If, for example, a particular wholesale branch has a few Tesco stores in its area, then a retail scheme can instantly double or triple its order. Likewise, independent schemes, such as those run by Menzies Superleague or Smiths Premier Club can suck up enormous amounts of copy for the specialist magazine.

The only way to guarantee that the correct amount of copy is going to these stores is by allocating at box level using database technology.

Percentage Sell Through & Availability

For specialist magazines, it is vital to make every copy count, particularly if printing costs are high. For the publisher, looking at your topline sales efficiency tells only half the story. Again, Box Level Data is the key to digging a bit deeper and finding out exactly whether those copies are selling or just sitting on the shelf. But, with so much data, you need a system that identifies the problem areas. There are two elements – sell outs and 100% returners. The key to successful copy management is to have the ability to systematically identify retailers that consistently sell out or return all their copies. Database systems have the capability to do this at the press of a button, using a pre-defined set of criteria (such as sales bands) and can then automatically add the work to a wholesaler’s sales brief.

Seasonality & forecasting

The final key element of good copy management is being able to accurately forecast sales trends. For the specialist magazine, seasonality is an absolutely critical factor in this. Before the advent of database technology, estimating a national seasonal trend would have been easy enough, but now it is possible to look at seasonality by individual retailer. This identifies and addresses more subtle variances in seasonality, so where one town or region may be showing seasonal growth, another may have a seasonal downturn.

Subscription marketing

Newstrade database technology can also be used to enhance your direct marketing initiatives. Although the specifics of the data, such as names and addresses of retailers, are kept from being used under the Data Protection Act, it nevertheless provides the marketer with valuable information on the geography and demographics of the magazine’s readership. Particularly for a young, specialist magazine which does not yet have a large subscription database, looking at newsstand sales by post code or store type and location can give a large clue as to where subscription marketing should be directed.

The internet

The internet has had a huge impact in most industries and the newstrade is no exception. However, despite its existence for a few years now, it is only relatively recently that its full potential has started to be realised.

Its greatest benefit has been to allow on-line trading between distributor and wholesaler. This has brought two major advantages to the publisher. Firstly, the amount of information that can be communicated to the wholesaler can be greatly increased. This can include more sales history, detailed store level allocations, promotion details, retail stocking policy etc. Whilst some of this would have previously been communicated on paper, all this key sales planning and copy management information can be seen on screen in much more detail. In some cases, it can also be fed straight into wholesalers’ allocation systems.

The other major benefit is time. Wholesalers can access their trade portal at any time of day or night, with access to all the information they will ever need. This saves time for the wholesaler and also allows any new information from the publisher or distributor to be posted on the site immediately.

Distributor – publisher portals

The internet has also given publishers direct access to their own sales figures. Whilst previously publishers would only have had access to paper reports from their distributors, they can now access up-to-date sales and marketing information 24 hours a day through distributor extranet sites. This has meant that meetings between publisher and distributor can be better utilised to plan, rather than to sift through sales figures. It has created a much more dynamic and informed environment in which to discuss the magazine’s future.

The future

The recent OFT draft ruling brings into focus the need to be able to react quickly to industry changes, and this will inevitably be best achieved by utilising the power of information technology. With other developments such as Sales Based Replenishment on the horizon, the need for IT solutions to help with ever more complex allocation decisions is inevitable.

For those who have witnessed this explosion of data, it has been fascinating to see how much more complex and involved the marketing process is today compared to a decade ago. What is inevitable is that change will continue apace. The only way to keep up with it is through continued investment in, and understanding of, information technology and this is a priority for market leading distributors.