Know your consumer - or else!

Come on, be honest with yourself! How much do you really know about your consumers? Who are they? Where do they shop, and why there and not in the shop next door? Why do they buy magazines, and how often? How do they select one magazine versus another? What really influences the purchase behaviour of your customers? How does it differ from store to store? How are shopping habits of magazine consumers changing?

We all think we understand some of the above, but how many of us really know we understand our consumers? How many of us have ever really bothered to invest the time and money to find out?

If you’re one of the more enlightened minority, then congratulations! What’s more, take comfort from the fact that you’re more knowledgeable than most publishing executives, and indeed many of the larger retailers (with probably one notable exception in Welwyn!).

Media fragmentation

What’s clear today, even to the majority, is that, as technologies converge and media audiences continue to fragment at a rate of knots, today’s patterns of media consumption are changing equally rapidly. Moreover, today’s magazines are caught up in an ever more ferocious fight, not only with themselves but also with other media for a share of the consumer’s time and money. What’s more, today’s consumer continues to get ever more sophisticated, and increasingly promiscuous in terms of their loyalty to both media brands and retailers alike.

Ok – things have moved on somewhat since the good old days when we all bought our groceries from the local market and enjoyed haggling over price. However, to think that consumers have lost that inherent ability to recognise value for money is way off the mark. Today’s magazine consumers are fluent in a language including strange and wonderful words such as BOGOF, Roll Back and Blue Cross. The customer is walking up and down retailers’ aisles scouring the shelves, looking for quality, value, freshness, fast service, convenience, exclusivity as well as value for money.

What is clear, if they don’t get what they’re looking for, they will literally bog off!

Research programme

At Future Publishing, we’ve been investing in consumer insight and working with some of our key retail partners in this area for some three years now. The value this has added to our business has been considerable, both in terms of our trading conversations and our ability to take our insight back into the publishing engine and ensure our magazines deliver for today’s consumers. For example, our research indicates that over 54% of customers never intend to buy a magazine when they enter a shop, and of those that did, 40% did not have a specific title in mind.

So how do we, as publishers, ensure we grab a substantial proportion of those customers when they enter the store?

Changing patterns of consumer behaviour don’t just make it difficult for publishers to allocate the right amounts of copy to individual retailers, ensuring the right levels of availability whilst minimising their returns. Retailers equally face just as much uncertainty about whether a potential shopper will buy a magazine from them or a competitor, leaving them to constantly question their operational efficiencies. As a result, working with retailers to understand customers better, and drive improved category returns, has to be the way forward if we are all to ensure that the magazine category continues to justify the amount of space it currently benefits from in store.

Again, our research suggests that magazine consumers enter shops that sell news and magazines on average 17 times a month, but only purchase a magazine on two to three of these occasions. For the retailer, converting these consumers into paying customers more regularly and / or increasing the average basket size / value is of paramount importance. Clearly, publishers and retailers alike benefit from this shared objective.

So, what really drives magazine sales?

If you asked most consumers when their favourite magazines go on sale next month, most wouldn’t have a clue. However, because of the frequency of visits a typical magazine consumer makes to retail outlets selling news and magazines, they do recognise ‘freshness’ or the fact that a new issue is on sale. Invariably, the majority of consumers buy a magazine when they see the new edition first, leading to dramatic spikes in the rates of sale.

Increasingly, publishers continue to invest vast sums of money in covermounts and price promotions. To what extent we all understand the value and long-term impact of these promotions is, again, questionable. Moreover, given that so many publishers have jumped onto the ‘covermount merry-go-round’, it’s hard to find any examples of ‘real innovation’ that have substantially increased the brand efficacy of those magazines for the long term.

With no end in sight for the ‘gift pit’, it is important to again understand the role of covermounts in the consumer’s purchasing process. Our research would suggest that, whilst covermounts may initially grab the consumer’s eye, they don’t really persuade a customer to part with his or her money until they have made a detailed review of the cover-lines, assessed the relevance of the magazine to their precise needs / wants and discounted other magazines within their potential repertoire. Only after this sophisticated, albeit all too often subconscious, process does the covermount become more relevant in the consumer’s mind as they assess the relative value for money of one magazine versus another within their final selection.

Needless to say, when we get it right as publishers, the results can be staggering in terms of the potential sales uplift. However, the uplift is invariably a ‘one issue wonder’, and far too few of us make any real effort to ensure we get any sort of retention for subsequent issues. Then again, if you don’t understand your consumer very well, it’s hardly surprising that so few of us focus on building loyalty programmes into our trade marketing strategies.

Enhanced dialogue with retail

Magazine consumers are no different to consumers at large. Indeed they are one and the same, and it’s clearly difficult to put any of them in nice simple boxes. However, if we genuinely listen to the customer and understand what they want, we can all achieve great results. Understanding them, and what drives them, can provide us with so much opportunity. On a simple trading basis with retail, the conversation with the retail buyer that starts with the phrase ‘the consumer tells us…’, instead of the traditional ‘we think…’ is clearly substantially more compelling.

So, how can genuine consumer insight really help publishers drive their sales, particularly through the bigger multiples?

All too often, it’s easy for magazine buyers, concerned with driving increased revenue and profit from the category, to take the easy option and simply stock the top 250-300 ranking titles. Whether you represent a smaller specialist publisher, or one of the bigger publishers in some of the more competitive sectors, we all have an obligation to develop our understanding of today’s magazine consumer.

We should all be wary of wolves in sheep’s clothing, disguised as ‘Category Managers’ ready to bite off the supposed ‘tail’ which is surplus to requirements.

Buyers already know that this is a dangerous approach, but shortage of time and insight coupled with a desire to progress their own careers quickly within their organisations, means that adopting the classic Pareto (80:20) approach to range management is often all too appealing.

No one understands our magazines better than ourselves, and being able to clearly demonstrate to a magazine buyer how a particular magazine fulfils a specific consumer need, whilst others simply add further duplication to a range, is critical if we are to maintain a healthy magazine category.

By investing in consumer insight, and presenting recommendations to retailers based upon ‘the way the consumer sees it’ will ultimately benefit us all. What’s more – failure to do this will ultimately lead the consumer to find you out and simply shop elsewhere if they cannot satisfy their particular needs / wants because your range isn’t deep or wide enough.

What’s more - investing time in this area doesn’t have to be costly. With the release of Tesco Clubcard data through Dunnhumby, and the availability of similar data for WHS Clubcard shoppers, there’s already an abundance of data that can provide all of us with a real opportunity to grow our knowledge of our consumers, and ultimately the sales within the magazine category.

My parting comment would be that the opportunity is clearly there for us all. It’s here now. Isn’t it time we all started to really grasp the opportunity?