MagSell’08

There was a bullish mood at the conference. Future’s CEO Robert Price said that the economy was "challenging" but "not as gloomy as all that". In any event, said Borders CEO Philip Downer, magazines fall into the "affordable treat" category, and "the recession is a chance to guide punters to indulge in a treat." Smith News’ head of magazines, Simon Gage, said that whilst magazines were in decline overall, it was still a robust category at retail and compared favourably to books and music, both of which have been severely hit by online purchases and downloads. And, he continued, "our lower pricepoint should make us more resilient in a downturn."

But it’s not just the price of our products which make magazines a strong category. What drives magazine sales, especially in the specialist sector says Robert Price, is "passion" and this "underpins a bright future. People define themselves by their passions and interests and that’s why specialist magazines are so robust." Furthermore, by their very nature, magazines are "continually shifting and adapting to suit customer needs, so can always stay fresh."

BBC Magazines’ managing director, Peter Phippen, agreed: "Magazines are personal, both a reflection and a reinforcement of our own character. You don’t have a relationship with most FMCGs. A magazine is not like a can of beans. Magazines satisfy an emotional need, not a functional one."

Challenges at retail

Yet, despite the attractiveness of the product, challenges within the supply chain and at point of sale remain. Peter Phippen spoke of a "stark mismatch", whereby people use words like "treat", "indulgence", "to be savoured" to describe their relationship with magazines, yet see the in-store magazine fixture as: "functional", "basic", "crowded" and "stressful". Borders’ Philip Downer admitted that his stores "need better wayfinding". And James Lowman, CEO of the Association of Convenience Stores (ACS) reported a worrying mismatch between intended purchase and actual purchase of people going into his members’ stores to buy magazines; they simply can’t find what they’re looking for. COMAG’s Mike Mirams, who chaired the event, said that "despite lots of talk about retail theatre over the years, there had been little movement. Fixtures were still unexciting."

From retailers’ perspective, they still felt hampered by what they see as an unresponsive supply chain. For Borders’ Philip Downer, "some aspects of the wholesaler relationship were more 19th century than early 21st." The ACS’s James Lowman said his members felt a lack of control over the magazine category and suspected that publishers were more interested in pushing subscriptions. Many retailers, said Smith News’ Simon Gage, especially the independents, felt strongly that their allocations did not reflect customer demand and that they constantly "get too much of what doesn’t sell and not enough of what does."

SBR progress

The BBC’s Peter Phippen, who also sits on the PPA environment committee, said that the industry was living up to its environmental responsibilities. Next year, he claimed, "we would be the first magazine body in the world to report a carbon footprint." As an industry, he continued, we have "to measure it, monitor it, minimise it; but also to explain to the public that we are not as carbon heavy as others. The presumption that the digital world is carbon free is WRONG." 75% of our carbon footprint, he said, is accounted for by the paper manufacturing process. Which is why sales based replenishment (SBR) and more efficient supply management are so vital.

Frontline’s supply chain director, Simon Davidson, spoke about SBR; "there has been lots of frustration, but also lots of progress." Currently, approximately 8,700 retailers are using it, but there is still a long way to go. Yet he cautioned against unrealistic expectations. There was an SBR ceiling, which he calculated to be 11,000 retailers (or 40% of retail sales value). The reasons are twofold: hardly any indies have functioning EPOS systems, and even if they did, the wide range of system types would make standardisation difficult. Secondly, SBR can only work above a certain copy threshold and many retailers fall below that figure. So, said Simon Davidson, there is no "magic bullet". For non SBR retailers, other alternatives need to be explored: maybe a partial return to firm sale, or exploring ways of capturing reorders more efficiently – perhaps via the delivery driver or by reinvigorating the trade counter offer.

Many of these themes are not new. Indeed they seem to resurface each year at MagSell and other industry forums. The reason, said Frontline’s Simon Davidson, is that, "unlike other categories, we have a single supply chain used by everyone, and we mustn’t throw this away. It does mean, however, that we have to go as slow as the slowest members." "Our shared supply chain", he continued, "is a huge benefit to the industry. Because there is little room for competitive advantage in the supply chain, there is no reason why we can’t all work together."

On the subject of collaboration, it was widely agreed that the Magazine Week initiative was highly beneficial and that planning the 2009 event needed to start now. As Peter Phippen said, "we need to put our weapons down and put our shoulders behind Magazine Week 2009, and try to develop promotional propositions that are simple and universal."