What are channel partners'key priorities for driving magazine category growth and profitability in the year ahead?

Here’s how retailer, wholesaler, national distribution and publishing executives answered that question during a Periodical and Book Association of America (PBAA) “Focus Forward: 2010”panel discussion last week in New York. The panel was moderated by Rodale SVP, retail Rich Alleger.

James Miller, VP, Hearst Newsstand Sales, Comag Marketing Group: Like virtually all companies, Hearst is focused on prudent cost containment during the current challenging economy—that is, “doing more with less” in many areas, Miller reported. Another key priority for 2010 is getting back to and reevaluating the basics. Given the tremendous changes in the retail/newsstand marketplace over the past year, ensuring that the foundations, including distributions and retail authorizations, are sound is critical, he said.

A related newsstand priority is working with editors to ensure that covers reflect consumers’ changing habits and preferences. Hearst recognizes the importance of newsstand executives working regularly with editors to reinforce cover best practices, generally at least once every six months, and sometimes more frequently, depending on the editor and title, Miller pointed out. In all consumer publishing companies, the newsstand team needs to ensure that it “gets a seat at the table,” for strategic decision-making relating to editorial products and overall consumer marketing, he stressed.

When it comes to cover testing, Miller believes that there’s no substitute for in-market testing. Having consumers compare two different cover versions online simply isn’t the same as testing a cover within the context of live retail conditions, he said. Hearst/CMG has found market testing of covers “invaluable” for achieving gains by honing all aspects of covers, he said. Outstanding covers are "not just about having Jennifer Aniston" or other hot celebrities on the cover, he stressed.

Curtis Packer, director press promotion, HDS Retail North America: With consumer travel and airport retail traffic down significantly as a result of the economy, airport/transportation specialty retailer HDS is also focused on reducing costs, according to Packer. HDS’s sell-through rates for leading magazine titles are higher than average—50% to 75%—and the retailer continues to work on improving efficiencies as one way to reduce costs, said Packer. He added that HDS would like to see “some form” of scan-based trading as another means of controlling operating costs.

Packer urged publishers to invest in retail promotions. “As a retailer, we depend on that money” to drive sales for the benefit of all partners in the channel, he said. He also strongly encouraged publishers to help the retailer better leverage the potential of cross promotions. “If you have an idea, please talk to us, because we’d be more than happy to discuss it,” he said.

Steven Etter, president/CEO, Harrisburg News: The category has to concentrate first and foremost on improving display and positioning within supermarkets, for the simple reason that that’s where most magazines are sold, stressed Etter. “If we don’t do this, everything else doesn’t matter,” he said, while emphasizing that Harrisburg also continues to serve and expand presence in all types of specialty retailers.

As a result of focusing on relationships with supermarkets and serving their needs, Harrisburg, which sells nearly 75% of its magazines in supermarkets (although supermarkets, mass merchandisers and airports/terminals represent just 27% of the total retail outlets it serves) actually has a bit more space in supermarkets now than 10 years ago, he reported.

Etter ventured that, in his opinion, retailer relationships could be enhanced if field reps were in stores at least two days during the work week, and in stores within large retailer accounts during one weekend day.

He also mentioned the importance of making the category’s true profitability clear to retailers, and of expanding cooperative, full-category in-store promotion programs (see Update, this issue on results of a program recently conducted within Harrisburg-served supermarket chains) and publicizing the results. Wholesalers need help to reduce some distribution channel costs, including those resulting from duplication of efforts, he added.

While the battle to gain authorizations in mainstream retail outlets is more intense than ever, particularly for special interest titles, “the good news” is that a diverse portfolio of products is particularly critical to driving sales in retail chains that allocate more than average mainline space to magazines, Etter said.

Peter Olson, president, The News Group Canada: In Olson’s opinion, better communication between channel partners should be a prime objective for 2010. To illustrate his point, he mentioned two instances—one a book, one a magazine issue—in which a sales opportunity could have been more fully maximized if the ND could had been aware in advance of content of particular interest to Canadians and requested larger copy allocations.

He also reported that Canadian magazine sales would be more or less flat, rather than down somewhat, if it were not for sales lost as a result of niche magazine foldings and frequency reductions, pointing to the importance of such titles to overall category performance.

Buzz Kanter, president, TAM Communications, Inc.: Kanter, owner, publisher and editor-in-chief of Harley owner/enthusiast title American Iron Magazine, emphasized that publishers need to deliver more value than ever to readers to attract newsstand buyers and continue to compete successfully at retail.

Rather than reducing paper quality, editorial pages and staff, publishers should invest in better-quality and more content. If costs must be reduced, reducing frequency is a better option than reducing pages per issue, he said. --K. Lukovitz

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