Magazines 2005

On 3 & 4 May 2005, the great and the good of the magazine industry congregated at the Grosvenor House in London. The shadow of the OFT loomed large over the event and I suspect that supply chain issues crept into most of the sessions – in particular the retail one. James Evelegh squeezed in to hear this seminar – which at times was standing room only.

By James Evelegh

Some of the points that stood out included:

1. OFT unfair to magazines (Ian Locks, PPA)

The preliminary OFT ruling preserving the status quo for newspapers but not for magazines is discriminatory. Magazines (especially weeklies) are time sensitive too; magazines and newspapers compete for the same readers, the same advertisers and the same staff.

2. Freedom of press (Ian Locks, PPA)

The OFT ruling will lead to the closure of newsagents and consequently to news deserts – areas of the country devoid of newsagents. As such, this is a freedom of the press issue which the PPA feels is a government issue. The government is abrogating its responsibility and hiding behind the OFT.

3. Not the same as 2000 (David Stam, Marketforce)

The current debate is not the same as the 2000 national distribution debate. The multiples are not minded to bust the supply chain, however the possibility of disruption will be an ever-present. For starters, it is critical to nail down a precise definition of "passive selling".

4. Beware complacency (Mike Newman, Associated Newspapers)

If the current supply chain breaks down then, with the possible exception of large retailers, everyone loses. For wholesalers, 40% of their magazine revenue comes from their top five accounts. If they were to lose these, then their cost base would remain the same but their revenue would be severely dented. Publishers must not fall into the trap of complacency – of thinking that retailers can be kept at bay by KPIs. Beware the rogue retailers – there could be a land grab.

5. The 60 second challenge (Sharon Douglas, Natmags)

To enable everyone to be totally clear about the USP of your title, get your editor to undertake the 60 second challenge – in which they have to justify (yes, in just 60 secs) why a retailer should stock the title. It forces them to articulate their core competency. If you’re not clear about the USP of your title, then how can you expect the retailer to be?

6. Don’t ignore the indies (Peter Wagg, News on the Wharf)

Publishers are doing little to boost sales through the independents. Typically publishers have eight different segment codes for Tesco but all independents are lumped together under one. The indie sector is 55k different markets not one. Yet, says Peter, "taken as a whole, the independent sector is twice as big as Tesco."

7. Sales potential (John Porrett, Mills Group & David Cooke, Tesco)

Customer research shows that whilst 15% of Mills Group shoppers arrive intending to buy a magazine (their third highest category), 14% actually do buy. Is this slippage down to display, range or some other factor? Tesco research shows that 10% of its customers account for 43% of total spend on magazines. Both these bits of research point the way to areas of future growth potential.

8. News = hard work (David Cooke, Tesco)

News gets a prime position instore but is low margin. The handling of news is overly complicated; there is too much paperwork and it does not fit into Tesco’s established processes. In short – it’s a bit of an oddball.

9. Not one size fits all (David Cooke, Tesco)

Tesco is making some effort to tailor the range to the store. For example, it is trying to improve its overall service to ethnic minorities and magazines have a role to play in this. In its Kensington shop the range is being tweaked to reflect the more affluent surroundings. There are 347 optional titles and area managers are given some discretion. Furthermore Tesco is increasing its hard range by 5%. Opportunities do exist for publishers at Tesco.

10. Threat of online shopping (Anna Dawson, Institute of Grocery Distribution)

29% of magazines bought in supermarkets are impulse purchases. With the growth in online grocery shopping (Ocado et al) and the greater planning that that involves, how are publishers going to adapt?

11. Need to understand consumers better (Dawn Cordy, Egmont)

We need to find out what our consumers face at retail, what influences them at point of sale, can they find the magazine rack and can they find our titles when they do reach the rack.

12. Mums’ media preferences for their kids (Dawn Cordy, Egmont)

Mums buy magazine for their kids because they are interactive, stimulating and educational. They offer variety; are up-to-date; controllable; and keep their little darlings busy. Mums’ media preferences are (in order) books, magazines, video games, DVDs / videos and last (by a long way) TV. Kids are motivated first and foremost by the cover mount!

13. Publishers hampered by poor instore signage (Nicki Hill, Seymour)

The majority of magazine signage is not noticed and compares very unfavourably with other high impulse categories; for example the mouthwateringly well signposted lunch time sandwich section. Things don’t get much better when you arrive at the magazine racks; the category signposting is limited, uninspiring and too generic (eg Womens). There is little delineation between sectors (eg Teen / Pre-teen). Check out the greeting card section to see how it should be done.

14. And the last word. (David Cooke, Tesco)

"We have no plans for national distribution …….." All rightee then.