In a newsagency at Adelaide airport earlier this week I was surprised by the extent of discounting of key magazine titles. While this has been happening for years, the extent on show in Adelaide was greater, leaving me to wonder when we will see this in all retail outlets.
Bauer and Lovatts are the two publishers engaged in this Adelaide location. While only two publishers does not sound much, their level of engagement is considerable. Take a look at these four photos from the one business. I could have included more photos of more facings beyond these:
Anyone shopping here could reasonably wonder whether they should pay full price for any magazine. Indeed, the scale of the promotion in the business is so strong I expect it would damage shopper perception of the value of the titles – but, hey, I am not an expert in this area.
This promotion does not make sense to me as the retailer as it appears designed to lock a shopper into a publisher. I want to promote the whole magazine department, not just one publisher, certainly not one publisher where the margin dollars I make are cut as a result of a promotion like this.
But I suspect this retailer is not losing margin dollars as I suspect the publishers are compensating them to the value of the margin from a full cover price. When publishers have offered this type of promotion to newsagents they have not compensated to the value of the full cover price from what I recall. Even then, if they did, it would not be ideal in that you are not promoting the broad offer you have in-store.
I have made no secret over the years that I do not like campaigns like these discount bundle offers. I think they are bad on many levels. yet some publishers appear addicted to them.
While publishers have told me that transit is ideal for these bundled promotions, I have seen them too often in supermarkets, convenience outlets and petrol outlets. This does not augur well for newsagents who see magazines as a point of difference, something to value, something through which they attract key traffic. Educate that traffic to hunt for a bargain and you see your value as a specialist retailer devalued.
My question for newsagents is: Are you ready for discounted bundles of magazines to become the new normal?
Bauer again, who cares. Their titles are dying as they do not have the relevance anymore. Just like the newspaper companies they are resorting to discounting which only ends with customers devaluing their products. These titles are not part of my focus into the future.
This promotion has been around for a while. Saw same at Melbourne airport Saturday 8th. The retailer must be being compensated as wholesale cost of some combinations is greater than $10.
It is selective support that is denied to independents.
Do I care ? Only in that it reminds me my next cull of titles and pockets is overdue.
Can someone tell why Coles Supermarket do not sell Womans Day or TC Week anymore ?
correction TV Week
Mark and others,
As a Distribution only Newsagency we’re being slaughtered by this type of marketing.
All Mags sales are down, especially weeklies coupled with the move Bauer to close NS, we have lost so much market share.
My most recent figures suggest if I cancelled all mags but the top 10 weeklies and monthlies (only receive 10 titles in total) I would make more money.
Sorry John but I am confused by your remark. You are getting slaughtered by promotions like this yet you are looking at only having the top 10 titles which would put you right in the firing line of the exact promotions that are affecting you. Can you explain?
My shop doesn’t focus on these titles anymore but the niche titles that are not available in supermarkets, service stations etc. I have no USP when it comes to Woman’s Day, TV Week etc but I do when it comes to more demographically defined titles. My sales of the weeklies and pretty much any Bauer title has dropped significantly but I am seeing growth or remaining steady in niche titles. A side benefit is that I am able to cross promote higher GP products with more accuracy with niche titles.
same here we dont promote BAUER titles,looks to me they are doing more and more promotions with woolworths and coles .moved on to gifts ,toys and higher gp margin products. i do think that magazine distribution and publisher dont give a toot to newsagents.
Personally I think it highlights the ability of non-newsagency retailers to get better commissions than newsagency specific marketing groups. That is the reality.
I think it reflects a publisher being able to negotiate a deal with head office, be certain every outlet will comply and the retailer not caring about the overall magazine department.
Chris,
While our weeklies are suffering badly, if I were to remove all other titles than our top 10, (I would reduce magazine workload from 8 hours per week to about 1.5), resulting reduced labor costs.
The reduction in labour costs (and only a small drop in total sales revenue), would mean an increase in weekly profit.
The problem is the same everywhere, we handle all this stuff (mags) that do not sell and are a cost burden.
So less is more!
John
Chris,
I made the same calculation a while ago. Magazine sales do not cover the cost of handling them. Without the magazines, I would have less staff for part of the day and could be closed an extra 7 hours a week.
The problem for me is that magazine sales are bought by my key gift buying customers, females aged 30-60. I will be winding down magazine stocks, but slowly and not women’s lifestyle.
No qualms with newspapers though, zero cross over. They are out as soon as Fairfax and Newscorp wish it. They remain only because they involve minimal labour and space.