Pandemic Publishing Roundtable: One Source Magazine Wholesale – Front End Merchandising With a Twist

Article by Linda Ruth

Last week, at the Publishing Pandemic Roundtable—Bo Sacks, Gemma Peckham, Joe Berger, Samir Husni, Sherin Pierce, and me— spent our hour with Gregg Mason of One Source, the distributor to major Natural Food specialty retailers, discussing the unique nature of the One Source checkout program, the changes that the pandemic has brought, and what we might anticipate for 2021. 

Joe: Can you give us some background on One Source and your role in the company? 

Gregg: One Source is a traditional direct distributor, in that it orders its product from publishers and ships to one location for pick and pack. We service primarily the natural food segment, with close to 2000 retailers nationwide. Our largest chain is Whole Foods, with 500 stores, followed by Sprouts with 365 locations. We also service a small sports retail segment.  One Source started small when the chains were small and grew along with them.  Our approach to magazine merchandising is unique—we don’t have mainlines. We are front-end focused with pockets at the checkout-only, and with non-logo’d pockets. Without logos, it allows dynamic movement of magazines which caters to the impulse buy of shoppers. We can sell more of what sells and the fixture presentation changes often.    When our retailers wanted a magazine program and looked at what traditional grocers had, they wanted something different, something fluid and dynamic. Something that would appeal to both new and returning customers; something that had the ability to drive high efficiencies. This fluid checkout was the solution. 

Bo: Does the fluidity you exercise with different titles in the pockets create a better sell through?

Gregg: Having the titles move around drives greater sales and sell through as they do stay in store but get shifted. Older product moves down, newer product comes in at the top of the rack. Titles with enough product at release for two pockets consolidate down to one over time. In this way we can extend shelf life for high-selling magazines. Our best-selling regular-frequency titles are all either bi-monthlies or quarterlies, we’re able to give them their full on-sale period.

Joe: Traditional retail stores don’t always follow their so-called “fixed” planograms; you can spend a lot of money participating and find you’re not in the program you paid for. In the One Source program you have opportunity to show if you’re capable of performing; though, on the other hand, these efficiencies can regulate a title out in the end. 

Gregg: Yes, it’s somewhat Darwinian; we look for not only high sell through but high sales per store. As draws come down, it’s hard to maintain the volume needed to stay in the stores, which can be frustrating to publishers. On the other hand, we don’t charge for the up-front placement; so if a title can perform, it will do well. For example, city titles can be the highest sellers in their home markets; so we created a city magazine placement at the front end.   Recently the efficiency rates have come down somewhat with the shift to high-priced, low-frequency bookazines. It’s amazing how the migration from regular frequency magazines to the bookazine model has dominated the business direction. With high-frequency mags, a normal order regulation system works; but with bookazines, different topics on same bipad can have widely different sales. For every single bookazine we order, we create an individual distribution for it, from the ground up.  

The Pandemic Publishing Roundtable from top left: Linda Ruth, Joe Berger, Gregg Mason (of One Source Distributing), Bo Sacks, Sherin Pierce, Gemma Peckham. Missing: Samir Husni.

Joe: Isn’t that considered bipad packing? 

Gregg: It would be in certain circumstances. What I’m referring to is a loose overarching editorial focus with different subjects under one brand. It’s literally a full-time job, managing these releases; but it’s necessary to garner volume sales.   

Joe: What changes did you see as a result of the pandemic? 

Gregg: We were lucky; our retailers stayed open. Sales were hit hard in the spring; since then it’s been a climb and partial recovery—creeping up, flattening out several times over. People have been gradually returning to more normal patterns. Our largest category is food and cooking; and those titles did well during the pandemic. We all cooked a lot more this year and turned to titles that can help. And publishers stuck with us. The children’s category, almost non-existent before the pandemic, took off like gangbusters. We found that the product couldn’t be too educational; it had to have a fun presentation.  We partnered with a publisher who collaborated with PBS kid shows—the product was just educational enough, just fun enough. Also the Highlights bookazines were hugely successful.  Shelter was a pleasant surprise. Domino took off, along with other shelter titles, primarily lower frequency titles and bookazines.  One area that has continued to lag are the city titles. They have not come back yet. Our stores are firstly suburban, secondly urban, and the urban stores are slower coming back. The commuting stores that cater to the people who work in the area have yet to come back; the residential area stores have.  

Joe: How are the indies and smaller chain stores doing? 

Gregg: We service Fresh Market and Natural Grocers, 160 stores each, they carry narrow edit, mostly just food, cooking, and health. Because they’re primarily suburban, they came back pretty well. And the independents have very loyal customer bases, so they also held up well. 

Sherin: Can you tell us a little more about Sprouts, what sells well? 

Gregg: They are located overwhelmingly in California and throughout the southwest. Their shoppers tend to be more price-sensitive, although certain higher-priced titles do very well, such as Willow and Sage at $14.95. Sprouts also tends to do very well with the vegetarian and Vegan titles. 

Sherin: What about getting their magazines on drop-down menus for online shopping? 

Gregg: We’re exploring and looking to move in that direction. 

Joe: MBR has started an initiative where they are talking to retailers about including magazines with electronic orders. You should be in that discussion. They’ve signed an agreement with an electronic platform, all the wholesalers should be at the table with this. 

Bo: Home delivery is not going away. We’ve retrained the consumer on how to shop, and that’s going to continue. Magazines need to be involved in this system. 

Gregg: Agreed, grocery was a last bastion of retail where people went to the store. Now many more people are getting delivery, and that won’t go away. And yet, although sales haven’t returned to where they were, they’re better than we expected, one year later. But you can’t make up for lost foot traffic.  

Joe: How do we get people back into the stores, or encourage them to find and buy the magazines? 

Gregg: We encourage our publishers to promote on their sites and social media platforms, to let them know we have their product, that it is available. In the stores, our biggest challenges are maintaining our pockets and keeping them open. The product that blocks the checkout are often at lower price points, lower profit. The migration to bookazines has helped show the financial impact of magazines, and what they bring to the retailer. 

Sherin: The Old Farmer’s Almanac has listings online of where to buy; we have robust PR when we go on sale; and we provide floor displays to appeal to consumers. 

Joe: What are you looking forward to in 2021? 

Gregg: We’re hoping to avoid a repetition of 2020’s peaks and valleys—and that the distribution of the vaccine will get people back in the stores. We’re prepared for an uptick in the city stores.   We’re poised to respond to changes as quickly as we can.

We Have Always Been at War with East Asia…And the Newsstand Has Always Been, Um, Challenging?

If I had made an entry in my diary every time someone told me in all seriousness that the single copy sales business was: Terrible, horrible, corrupt, inefficient, outdated, out of touch, wasteful, mobbed up, operated like the mafia, doomed, too busy ripping off publishers, retailers, wholesalers, consumers – to do a good job, that we should all be in jail for taking advantage of publishers…

… Then I would have a memoir considerably larger than a Brandon Sanderson novel.

That’s a mighty big book! (Source: BrandonSanderson.com

 

Nothing New Under the Sun

There is a verse in Ecclesiastes that says, “There is nothing new under the sun.” King Solomon wasn’t being a cranky old cynic when he wrote this. He was talking about the cycles of nature in life, not the rat race of the 21^stcentury world. But while the complaints about the newsstand business are often the same year after year, the simple truth is that today’s newsstand sales business is not your fathers’ newsstand business. Or mine. And my father was in the newsstand business.

Last month industry guru and prophet Bo Sacks released two opinion pieces in his newsletter. One from former Ziff-Davis circulator Baird Davis and another from former consultant and industry leader John Harrington. Take a moment and check them out.

Both articles point out things that are very clear about the newsstand:

• Sales are down dramatically
• Sales for leading AAM audited titles are down even more
• Retailers are cutting back on available space at the newsstand
• There is continued consolidation at retail, wholesale and national distributor levels

I worked for Baird when I consulted for Ziff-Davis in its earlier print life. He is a good person and not someone I think of as gloomy or full of doom. In fact, I remember him as hard working and rather clear eyed. He succinctly points out the tremendous losses we have seen at the newsstand, especially with larger AAM audited titles. There is no denying the fact that a business that was generating about $5 billion in retail sales before the big crash in 2008 is now generating less than $2 billion. Harrington, who is also on the list of good people, is the former president of the Council for Periodical Distributors of America and a retired consultant. He points out that different participants in newsstand distribution have very different goals when it comes to profitability.

But We Knew This Already, Didn’t We?

Are industry leaders going to get together and “solve” the problem of the newsstand? Probably not because there are still too many competitors vying for space on the publishing side*. Moreover, all publishers, small, medium and large have a lot of other things to focus their attention on these days. Finally, it doesn’t seem like anything will happen without the seal of approval from the major wholesaler, TNG, or the largest national distributor, CoMag.

Captain Optimist Arrives

Earlier this week, fellow consultant John Morthanos tossed a bit of fuel on the fire in an opinion piece in response to Baird’s op-ed on Bo Sacks.  John makes the case that we should look beyond AAM numbers (I heartily agree). He cites the remarkable change in title rankings at chains like Barnes & Noble and Books A Million where traditional top ranked AAM audited titles (Think Cosmopolitan or House and Garden) have been supplanted with recent launches like Magnolia Journal.

He’s right. And as someone who is addicted to publishing stats, I’m endlessly fascinated by the report. But is that the point?

Single copy sales, the sales of print magazines at retail are down. Dramatically.

And,

Retail and wholesale consolidation has reduced a publisher’s ability to be profitable at the newsstand.

And,

If a segment of your business is not as profitable as it once was, and there is little chance of it returning to the same level of profitability, you tend to cut back your participation level and focus your attention on the parts of your business where you see opportunity.

It’s true that new titles continue to be launched on the newsstand. Some, like Magnolia Journal, Pioneer Woman, and the Centennial Media SIPs sell incredibly well. However, they don’t make up for the tremendous losses we see from former market leaders. How often can we rely on high level brand awareness to create winners at the newsstand?

Let’s be realistic. Chains like Barnes & Noble and Books A Million are walled gardens. Their customers are actively looking for something to read – something in print. The B&N newsstand is well run and managed by a terrific magazine oriented staff. So is Books A Million. But that doesn’t mean we ignore the troubling signs that chains like Barnes & Noble have publicly experienced over the past few years.

Captain Skeptical?

It would be nice to think that every time a retailer chops a mainline in half or cuts 15 pockets from a check out that our wholesalers, national distributors and publisher quarterbacks rush in with the latest study from MBR and walk out with even more space. Half of it allocated to new, up and coming indie titles.

Maybe that does happen, sometimes. There are a lot of great people in our business and they do work hard to promote the category and maintain our space and viability.

But facts are facts and we’ve lost space. Despite some very visible, exciting and promising bright spots, sales are down overall.

From where I stand (I have a standing desk these days), these battles will continue to be hard-fought. We will never get away from the fact that store traffic is down. We have to acknowledge that there are a lot of distractions fighting for the public’s attention and money these days. Those of us who work in newsstand have to fight even harder to get the attention of the managers of magazine companies and the affiliated partners in the distribution chain because we are now a part of the magazine “media” business.

So, what to do? That’s easy.

Work hard. Vie for attention. Create your own promotions. Check your data. Prove your worth. Cooperate with others in the distribution chain.

Can you be both an optimist and a skeptic?

Yep.

*I am very much in favor of competition. Just in case you were wondering.

The Five Most Egregious Magazine Covers of 2016 (S0 Far)

There are now so many ways for a magazine to brand itself. There is, of course, the print edition. Even for the most digitally savvy publication, everything usually starts there. But there’s also the web edition, the mobile edition, the digital replica. Then there are the social media feeds, events, videos and newsletters. So which comes first?

I don’t think I know anymore. But one thing that has not changed is the magazine cover. Think of it as the front door to a magazine brand. Sure, it means very little for the reader who drops into the website (In fact, on many magazine websites, you have to work hard to even find a mention of the magazine). Subscribers, be they print or digital, have already ponied up money for the magazine so they’re going to get that issue no matter what.

So why, even in this day and age, is the cover so important?

Because it is the front door of the magazine. It says to potential readers who you are, what you are about. What’s in between the covers.  Most importantly, if your reader picked up the magazine at the newsstand, they paid full cover for that one issue.

Sure, you could have subscribed to Entertainment Weekly  for one year for $5.00. But if you went to the newsstand and picked up the June 17 issue with the TV show Mr. Robot on the cover you paid full price, $4.99, for that one issue. So that means you must have really liked Mr. Robot and Entertainment Weekly. Right?

As far as I am concerned, there is little more unsettling in the world of cover design when a well known magazine blows a flat note and puts out an unattractive cover. What were you thinking? Why did you do that? Sometimes it’s groupthink. Sometimes it’s an experiment that just went wrong. Sometimes it’s just that there was nothing else to work with.

Last year, the Foredeck introduced the “Most Egregious Cover of The Year” of the year. The response from readers was pretty interesting. Now that we’re halfway through this year I thought I’d share with you what I think (You’re entitled to your own opinion of course) are the covers that that have made me wrinkle up my nose and wonder what went wrong.

For your consideration:

5. Outside Magazine, May 2016

The only real issue here is the simple fact that you have to stop and squint to read part of the cover line. What they were trying to tie together was the National Parks 100th anniversary and their list of 100 things to do in the national parks. Most likely this looked way better on a computer screen than it did printed on paper and placed on a newsstand.

Fortunately for Outside, they publish twelve times a year and from my perspective they usually hit triples and home runs.

Swing and a miss.

 

4. DuJour Magazine, Summer 2016

Let’s leave aside the potential political debates about this issue. They are immaterial for the purposes of this particular post. Sometimes black and white covers can work well. Heck, the Foredeck has listed some in times past. But there’s just something creepy and foreboding about this particular one. Even if Donald Trump weren’t running for president, the image of him lurking in the background is just….off.

Don’t look over your shoulder Melania….

 

3. W Magazine, June 2016

File under “An Unlikely Mess.” Who doesn’t love English model-actress Cara Delevingne? But why dress her up as an emoji? Let’s hope her new movie does better.

Not so sure I ❤ this…

 

2. Vogue Magazine, May 2016

Taylor Swift and Vogue have a long history together. I made their February 2012 cover featuring Taylor Swift as my #1 cover from the Foredeck that year. Usually Swift on the cover is instant attraction on the newsstand. It’s not that one of the most popular and powerful singers in the world can’t go out and change up her look. But in this photo, otherworldly looks unrecognizable. I’m not opposed to red backgrounds. In fact I love primary colors in the background. But this one….

…not so much.

1. Chicago Magazine, January 2016

To me Chicago Magazine is the epitome of a successful city book. I look for the latest edition of Chicago Magazine every month when I’m out at retail. Usually their covers are reliably good. It’s as if they take to heart every single CRMA presentation ever given and then make it better. “Top Doctors” editorial is generally a top newsstand seller for most city publications. Most “Top Doc” covers feature some sort of generic doctor on the cover so it’s understandable that Chicago tried to do something creative. But this?  Should we call Spiderman and let him know that Doc Ock has invaded the Second City?

 

Paging Dr. Octavius!

The good news is that for every flop of a cover, there is usually a redeemer or two. Chicago Magazine has published several very good covers since January 2016 and for the record, may I show you what I think is one of the very best covers of 2016, Chicago Magazine’s July 2016 cover. Featuring a puppy.

Who doesn’t love a puppy?

Just remember. The cover is the front door. You want curb appeal. You want people to spend full freight on that copy. You want them to love it so much that they’ll turn around and subscribe. And subscribe to the newsletter. And pay for a ticket to your event. And buy your “Buyer’s Guide.” And subscribe to your YouTube feed.

More puppies. Less octopuses.

 

 

A BoSacks Reader Speaks Out

Precision Media Group leader Bob Sacks was an early adopter and claims to have America’s “Oldest e-Newsletter”. Five days a week you can open up your email and find three interesting and timely articles Bob has selected that cover a variety of trends and topics of interest to the magazine media business. Bob often includes his own insight and wit to many of the articles. On a regular basis he collects and then publishes the thoughts and responses from his readers.

Two weeks ago, I posted “Maybe We Should Rephrase The Question”, asking if perhaps it was time to stop lamenting the decline of the newsstand and instead see what was working and how we could replicate that on a grander scale. The post appeared in the newsletter and along with a huge lift in visitors to this blog, one of Bob’s readers responded to the post with a series of suggestions on lifting newsstand sales.

I’ve reposted the questions below along with my own answers. The questions are good and I hope they spark a discussion about what works, doesn’t work, and could work on the modern newsstand:

Question: What if there were five times as many places one could buy a magazine (not every magazine, but a magazine)?

At a national level something like that has happened – although not to the level you  propose nor in terms of the quantity of retailers with mainline magazine racks.

There are many places now where the “newsstand” is a select group of titles that reflect what the retailer carries. Home Depot, Orschelns Farm & Home and Toys R Us are just three examples.

Twenty-five years ago, many chains in these categories did not carry magazines.

 

Question: What if we made the newsstand inconvenient?  Like only one in a community instead of every line at the grocery?

You must be thinking that scarcity would drive up demand?

In some communities newsstands are scarce. But perhaps not in the way you are imagining.

The local wholesaler no longer exists and neither do the bookstores or newsstands that the company owned. Locally owned stores or regional chains (Think Arbor Drugs in Michigan or an IGA Supermarket) that used to carry a large assortment of magazines have been sold and merged into a national chain and the only place to get a magazine is at the Wal-Mart or Walgreens. Both now have smaller mainlines and checkouts.

The question isn’t so much scarcity of magazines so much as the dip in demand for newsstand copies of magazines and the changing habits of the shopper.

Question: What if newsstands were a drive-through?   

Interesting! There is (or used to be) a “drive through” convenience store chain in northern Ohio. I do recall them on some “dealer guides” (remember those?) back in the day.

A more modern variation on that could be the “Pick Up” locations that the grocery chain Peapod has developed. But you’d have to have a committed program with the retailer. This means that someone in the current chain of delivery would have to think the idea is worth pursuing.

Frankly, it would be great (and simple) to include single copies of magazines in home deliveries of goods. My concern would be how to get the public to buy in and make it a habbit.

 

Question: What if magazines were sold in pairs of titles rather than one at a time at retail?

Clearly this question was asked by someone who has never seen an adult magazine “pack”.

Tongue now out of cheek: That is happening on some levels. Hearst sold a “pack” of their Fall Fashion titles this year in a gift box. Fantastic idea!

Local city publishers will often polybag a “Home” or “Fashion” supplement with their main title.

The real issue is always cost. Doing this isn’t cheap. ROI is not guaranteed. Think of the challenge if it were a case of “co-publishing” and two different publishers were involved.

And staffing. Having enough people around to make it happen is usually a challenge.

 

Question: How can we enhance the value of the single copy?

By charging a more realistic price for a subscription?

Question: What if single copies were sold and distributed monthly to people who meet for social reasons already?   

A great idea! Let’s staff up!

In the audited circulation world, that can often be looked at as “verified” or some sort of club membership subscription – not single copy. Or it could also be some sort of paid bulk circulation. Again, the issue is finding the right group, selling them on the title, getting them to agree to a price that will pay for itself, and making the effort worth the while.

As an example, a sports book I once worked with had the great idea of selling the magazine as an added value to local sports clubs. Great idea. But hours of labor to find, locate and then sell the program to one local club would at best yield a hundred or more in a bulk delivery at a severe discount. It’s often a question of resources. Time, Inc. or Hearst may have the resources, a small circ title doesn’t.

 

Question: What if a fresh People magazine went home with every customer at a hair salon?

Joe Ripp is a little busy right now. And, see above for AAM circulation rules.

Question: What if a fresh copy of Real Simple went home with everyone who spent $50 at Home Depot the first week of every month?

See above. But I imagine that if an RS competitor is reading this….

Your timing is perfect! At a client meeting last week, we pitched this idea for a different title in a totally different retail environment. It is still on the tickle list so we’ll see where it goes when we meet with the buyer.

Question: What if newsstands become emporiums that sold what was advertised in the magazine(s) associated with the emporium?

If I’m reading this question correctly, you’re suggesting that a publisher try to compete with Wal-Mart in both physical and e-commerce?

If I’m not (reading this correctly), in reality one of the “pros” that we use when we pitch a magazine to a retailer for authorization is that the people who read the magazine will be in their stores looking at their wares and that the products advertised in the magazine are already in the store.

A more advanced variation on this theme can, and should be: Some level of cooperation between the publisher, manufacturer and retailer to bring potential readers into the store and purchase both the magazine and the ware. To varying degrees of success, publishers have attempted this. However, the idea is far more simple than the execution and it again, often comes down to a question of staffing and ROI.

Does Bob’s reader have some good ideas? Can we make some of this happen on the newsstand and will it lift sales?

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