The past two months have been a long hard slog of budgeting, reporting, meeting, writing, re-writing, making calls, taking calls and yes, believe it or not, here we are well into the 21st century, making copies.
What’s it all been about? Publishers still want to be on the newsstand. I’ve been working with several publishers who want expand their physical visibility and they want it to happen in the coming new year.
Publishers continue to participate in check out pockets. They will pay for retail and wholesale based promotions. Magazine publishers will participate in airport programs. It’s important to be “out there.”
But that doesn’t mean that we don’t have problems above and beyond the competition for people’s time and “eyeballs”. Within our own industry we need to address and solve the question of Scan Based Trading. Who owns this product? How do we square the circle when we try to market an impulse item, but manage it within the store the same way as peach rings, troll dolls or note pads because, “That’s the way the retailer wants it!”
We still have difficulty managing our distributions. Our remote, centralized way of managing order regulation takes a lot of local knowledge and instinct out of the equation. No matter how savvy the data is, now matter how good you are, no matter how well meaning, if you’ve never been to Cuyahoga Falls, Ohio and all you know about the stores there are the demographic keys and the rack size, well, you don’t know anything about Cuyahoga Falls, Ohio or the people who may buy magazines there.
But one interesting item made itself very apparent while working through all of the data I’ve been snowed under for the past sixty some odd days: The loss of Borders was not only very big, it is still being felt. Even now, as we compare issues where there was no Borders distribution in the prior year, and in some cases, where we tried to find alternative sources of distribution to replace that lost retailer, you can see and “feel” where the volume is not the same. Where the presence of the other bookstore chains and related retail expansion simply did not pick up the slack.
On a related front, I am still surprised that our industry never made an overture to the independent bookstore market and tried to expand our presence there. While it’s a small market, would it hurt to try and pick up a few points of unit sales?
There’s been a long and worthwhile discussion about finding alternate retail markets for magazines: Beauty supply stores, craft stores, auto parts stores, dollar stores, outdoor gear and office supply stores. All of our major wholesalers have divisions dedicated to these markets and they all do a good job of locating, pitching and servicing these accounts.
But from what I can see in the numbers, for many magazines, five copies in a beauty supply store simply does not take the place of more than 50 running feet of mainline space in a large format bookstore.
There’s just no way around that. And it’s just one more thing on the long list of things our industry needs to address.
It’s the second week of August and you know what that means. The first half of the year reports from ABC have landed and everyone who is anyone who has the slightest interest in magazines, print media and the future of print media (And access to a soapbox) has an opinion:
They all say pretty much the same thing. Let’s focus on newsstand. Everyone’s an expert! Sales are down. Sales continue to go down. This must mean something. Fewer trips to the store. Less impulse buys! More digital! Prices are too high!
There’s plenty more where these came from, but I thought I’d grab some links from the first page of a Google search and add in a few from my own incoming e-blast links.
As an aside, just when the article from Audience Development that I linked to got interesting by discussing the importance of the future of Scan Based Trading, the author opts to leave it for another time. Frankly, the resolution of that issue is the one that could decide the future of our business. But it’s more fun to write about numbers, apparently.
If you’ve seen my Twitter feed over the past week, you may have noticed that in between rounds of budget preparations, print order closings, marketing updates, new launches (Yup, we still do that!) I’ve had a pretty specific opinion about all of this coverage. Statistics, as we know, can be made to lie like a politician. These particular numbers, however do not and we ignore them at our own peril. I’d be a fool to try and dispute them. Our friends at MagNet back these numbers up. Although they do point out some interesting, very positive trends in between all of this doom and gloom and I thank them for that. But the causes and effects of what is happening in the industry go so much farther and deeper than what gets reported. I’ve lived in this world for most of my professional life and I am still not 100% sure of everything. But I do have an opinion (which I’ve expressed here often enough).
I’ll leave it to you discerning readers to interpret it.
But, in closing, I’ll leave you with some thoughts from the very insightful, envelope pushing Mr. Conan O’Brien (Note: If you’re the impatient type, fast forward to the 1:20 mark):
It’s the selling of the stuff (magazines), however, that is often complicated. Product has to be shipped at just the right time. The content has to look appealing. It has to be displayed just so. It has to get to just the right mix of stores in just the right quantities so that all the links in the chain can make some money from the sale (A lot of people dip into that $4.99 cover price before the publisher takes the final cut).
All along the way, one simple blooper, one simple slip up can mean the difference between front shelf displays or a missed on-sale date. Between a small profit, break even, or a loss.
Some things are unavoidable. Adults who conduct business prepare for mishaps and deal with them. You know what you have to do when the printer mis-ships sub copies to a wholesaler. You’re going to have to sticker new UPC codes onto the cover and it will cost you. If the road to the break up agent gets washed out in a tornado, you’re going to have a delayed shipment. If the union at the grocery chain goes on strike, you may have trouble getting your product in the door. If your editorial and art team once again decided not to include you in the cover reviews and produced a stinker for what is supposed to be the biggest issue of the year…Well, that happens.
We handle that all the time.
What’s strange is the strange, the absurb, the unusal roadblocks that we now place in front of ourselves on a daily basis. How did this come about?
Here’s some examples from my daily notes. All every day occurrences that make this publisher’s representative and his colleagues (many of these were shared with me by my colleagues) wonder if we really, truly, honestly want to sell stuff anymore.
Require new retail authorizations to buy a “Promotion” or pay extra RDA (Retail Display Allowance) in order to gain authorization to the chain.
Have wholesalers deny access to any more than 10% of the newly authorized chain account (even though the market is much bigger) because….well, “because”.
Lose a chain authorization that you paid up front promotional monies for after one year because you were denied access to the proposed distribution by your servicing wholesalers issue after issue after issue because your sales did not meet the threshold….well, “because.”
Have your national distributor send out “distribution assignments” without your pre-approval or knowledge.
Have the national distribution assignment that did not meet your approval include competitive titles and/or goals that do not meet your publishers goals, objectives or competitive titles.
Have a cover review meeting with your publisher, editor and art team. At the close of the meeting have the art director note that “This was a waste a time.” and “In a year we’re going to be all digital anyway so who cares what the newsstand cover looks like.”
Have your circulation department spend hours re-keying sales data from industry information suppliers, wholesalers and national distributors because each link in the chain provides data in a different format and none of them match how you review and interpret the data.
Sit in a meeting and listen to an editor berate the “middle men” who suck all the profit from magazines. “We’d be better off dealing with Amazon and Apple,” he proclaims, “That’s where all the kids go anyway.” He neglects to connect the dots. Apple and Amazon are “middle men.” They sell other people’s stuff for a cut.
Pay tens of thousands of dollars in promotional monies in order to achieve circulation targets and have those targets washed away almost immediately in “scale back” allotments that do not take into account actual sales in promoted accounts.
Have your distribution managed by individuals who are not familiar with your title, it’s regional strengths, it’s seasonality, or the editorial content of your magazine.
IPDA released an encouraging report this week from Kable Media’s Jim Roberts detailing the interesting and innovative things some of their clients are doing in order to maintain and grow their single copy sales.
Right now, I am in the middle of a pretty extensive relaunch effort with a multi decades old publisher. The publisher has partnered up with some web based entrepreneurs who like the melding of print and digital and they are excited about their prospects on the newsstand. People still want to do this. This is good.
Doug Stephans, the president of consulting firm Retail Prophet, asked in his blog post last week, “Is the companys DNA killing your brand?” In his post, Stephans examines the numerous missteps that Avon cosmetics has made since the later part of the 20th century and their inability to adapt to new retail challenges and the 21st century’s trends in social media and retail marketing.
Is our own industry’s DNA is hurting our ability to sell our product? Have we mutated into something that hurts our ability to grow? Four links in a distribution chain with differing methods of measuring sales and financial success. Perhaps our industry DNA is so mutated after all the changes in the past two decades that we’ve lost sight of our one simple goal:
Editor’s Note: This post sat in my edit que for about six days. Since it’s first draft, others in our industry have also written about our struggles to get out of our own way.
I’d encourage you to read John Harrington’s excellent history of how the newsstand business consolidated in the 1990’s via BoSacks.com.
For additional perspective from another industry consultant, check out Linda Ruth’s additional thoughts on magazine display by clicking on the link above.
As always, I’d love to hear your thoughts on how we can improve our industry.