The Australian Financial Review today publishes a report (p 47) by Neil Shoebridge about a 12 week trial of a centralised magazine distribution system in 12 Victorian Coles supermarkets. The report claims a 20% kick in sales of magazines whereas for the same period other Coles stores reported a 1% kick in sales of magazines.
Coles wants more control over the range and quantity of product it sells. The article documents the challenge of this process for traditional magazine distributors – Network, NDD and Gotch. The greater control, according to the article, is being sought over returns. It says that a more efficient returns system might dust distributor revenue by $4 million.
One anonymous senior magazine industry executive is quoted as saying “Magazine distribution needs to be a push system, not a pull system, because we know the business better than the retailers.” My own experience is that such a claim is nonsense. That my own newsagency and many I know sell out of TOP 50 titles with half the shelf life of an issue to go get we return more than 50% of the BOTTOM 1,000 titles suggests that the push system is failing. It may not be failing for the distributors but it is failing for newsagents and other retailers as the AFR article suggests.
In my shop, year on year, we have achieved growth of between 28% and 35%. In the top selling women’s weeklies segment our sales growth is in excess of 50%. We would have achieved more had we been able to get the product to sell.
So, here is the newsagency channel starving for oxygen when our major competitors, supermarkets, are able to engage in trials of supply chain alternatives which better serve their needs.
I cannot provide a link to the AFR article because of their policy of making online content available only by subscription.