Consumers continue to buy print magazines and with a little attention, supermarkets can put themselves in a strong position to sell them.
According to the rock band the Buggles, video may have killed the radio star, but the notion that digital media is killing print magazines is a vast oversimplification of the reasons behind the decline of print.
While retail magazine sales continue to trend downward—sales are off almost 10% versus last year—industry observers say that is more a result of the slumping economy and the dearth of disposable income than fallout from digital. On top of that, supermarkets continue to lose shopper trips to other retailers. As a result of this changing environment, the magazine category, which once essentially sold itself, now needs a little TLC from retailers and publishers.
“The challenge for publishers is to align with supermarkets, making sure they are leveraging their best assets with supermarkets go to market strategies,” says Jerry Lynch, president of the International Periodical Distribution Association (IPDA), based in New York. “Traditionally, that is not something the industry, with some exceptions, has done very well.”
The IPDA is doing its part to boost single copy magazine sales with its “Magazines Power in Print” campaign. “We are trying to call out some of the benefits of the category, including some of the unique consumer propositions,” says Lynch. “Not too many categories have the flexibility magazines have, the profitability is great and that seems to be taking hold with retailers.”
The campaign addresses profitability as an element, citing a 2011 Willard Bishop Grocery Super Study that reported magazines deliver 12% of general merchandise’s profit while using only 4% of the space. For a category that has almost 93% household penetration, magazines account for less than 0.5% of store sales. For this reason, Lynch is confident there is room to grow retail magazine sales.
“You don’t have to change much to move the needle substantially,” he says. “If you grew to 1.0%, I think best in class is about 1.5%, so it is not hard to see you wouldn’t have to appeal to too many more consumers to makes sales really jump.”
The campaign, which runs through the end of the year, also addresses the growing presence of digital media. As the magazine category, both print and digital, matures and evolves, some liken it to the greeting card category. Many observers believed the advent of email was going to kill off greeting card sales. That did not happen.
“There is an evolution taking place as to how the magazine category is going to be used by consumers,” says Lynch. “It is not going to be the same as greeting cards, but it will grow and I suspect it will be a total package where there will be a combination of print and digital communication. I believe that retail can and will remain a key component for magazines and their readers as the evolution continues and thereby increase retail sales.”
Industry statistics support the symbiotic relationship between print and digital media. Recent research suggests that a majority of magazine readers—almost 90%—want access to both digital and printed versions and magazine publishers are increasingly using digital as means to complement print.
There are still other consumers who want to eliminate digital—for a short while—completely. “In the publishing industry we talk about lean forward and lean back experiences,” says William Romollino, vice president, shopper insights for Time Warner Retail Sales & Marketing, based in Parsippany, N.J. “We lean forward with our shoulders hunched over a computer, smartphone or tablet for hours a day. There is still a fairly large portion of the population that wants to lean back, and whether that is with a printed magazine or some other leisure activity, they want to divorce themselves from being attached to a digital device. That is a huge aspect to why magazines continue to be successful.”
Beyond digital, some publishers are trying to make magazines more like a typical CPG category by creating consumer promotions, couponing and loyalty programs. Publishers are also working directly with supermarkets, creating incentives for consumers to buy specific titles.
“We are working with retailers to use loyalty cards and consumer purchase information to drive how we are offering consumer incentives,” says Romollino. “These are not generic national programs, they are specialized and tailored to a specific customers buying behavior.”
looking at “bookazines”
Though seemingly counterintuitive, observers say some of the best sellers in the category are the higher-priced special issues and “bookazines” that provide unique content and a perceived higher value to readers—not unlike other categories in the store. These products usually fall into the $4.99 to $11.99 price range.
“Bookazines and special issues are high value products,” Romollino. “You don’t just look through it once or twice and discard. It is something you can spend time with. It is something you put on a coffee table and others would find interesting and engaging.”
Bookazines and special issues also have a longer shelf life than the typical issue, about three months on average. This allows for retailers to first merchandise them at checkout and then rotate them into the magazine aisle and throughout the store as needed, later in the cycle.
Logic suggests that outposting magazines throughout the store is a good way to increase sales. Observers say that while some make great sense and have been successful, such as wine magazines in the wine sections and parenting tiles in the baby aisle, grocers need be very careful when doing so. “There is an opportunity there,” says Romollino, “but retailers have to be very surgical about how they go after those opportunities. It takes a long time to socialize customers into looking for magazines in nontraditional locations and then are they really in the mindset to buy a magazine when they are shopping for core grocery items?
“If I had to rank the order of priorities on what supermarkets had to do to crack the code, I’d embrace the power categories at checkout, add the power categories (i.e. candy, magazines, beverages) to all self-scan lanes, locate the mainline area in the right place in-store, with the correct adjacencies. Once those are right, augment with assortment optimization.