There’s a Place for Trending, Niche Magazines at Checkout

Last week I posed the question, “Does the Supermarket Checkout Belong to 7 Publishing Companies?” I used as an example an independent retail chain in Michigan, serviced by an independent wholesaler, which places a mix of non-traditional titles on the checkout fixtures, with the result of each title having sales. I also suggested that these niche titles should have the ability to buy a single pocket in a chain for a fixture. I received a number of emails through Publishing Executive, LinkedIn, and my business account mostly telling me I was wrong. Some asked questions; some told me that it will never work; and some, well they said it best: "Small publishers will never pay for it," "The majority of checkouts in a supermarket are closed to the public and retailers don't want magazines," "The industry should stop waiting for the big publishers to fix this mess," and "Why should grocery stores turn away publishers who are buying checkout pockets." One VP for a major wholesaler wrote a positive comment on the concept of potentially having other titles at the checkout "It's not about placement or rack money; it's about sale." There were other positive comments, from national distributor representatives, other consultants, and wholesalers present and past including Larry Scheur who left wholesaling magazines ten or so years ago. Why Trending Topics Should Have a Place at Checkout I advocate that in addition to the possibility of having independent titles buying a checkout pocket in a chain, there should be one rack dedicated to "alternative titles," hot topics, and trends. And before you write to me and say it won't work, this "farfetched" concept is currently working. There is an independent wholesaler who services a number of small and very large supermarket chains. Personally, I don't always agree with this wholesaler's requirements, especially if it is restricting the growth of a title I represent because of their efficiency standards. But I do have to admit that they do a great job selling magazines, mostly unheard of "alternative titles" at the checkout that are making a great deal of money for their retailers. If you went into one of the retailers they service recently, you would have been surprised at the number of coloring books they had on sale at each checkout. And as we know coloring books are a very hot category right now. This independent wholesaler did not squabble with publishers about pocket fees for a display; they identified which publishers created coloring books and they ordered them from the national distributor for sale in their retailers. A major national bookseller also promoted the coloring book category as well and made the category profitable for their chain. But the traditional national wholesalers have restrictions as to what magazines they can place in a checkout pocket because they are "owned" by big publishers, as one person pointed out in an email to me. Publishers & Retailers Are Missing Major Sales IF there was one fixture available for hot categories and titles were not charged pocket fees that may take weeks to negotiate; they could have put coloring books on this fixture and given the magazine category a significant lift in sales. What difference could this make to a retailer's bottom line? If there are 12 pockets filled with $9.99 magazines that tie into hot categories, and each title sold 60% of a 10 copy draw, the pocket can turn every 3 weeks, and that single fixture should generate $11,500 a year in sales for one outlet. Multiply this by a 10-store chain and that's $115,000 in sales. For a 500-store chain, that's $5.7 million dollars annually. Even at a lower cover price, let's say $4.99, I'm sure the 500-outlet chain would welcome a $3 million dollar boost in retail sales. Multiple turns each month and products that are desired by consumers will generate sales. Retailers Need to Build in Flexibility to React to Trends My recommendation can easily be countered because wholesalers already sell "feature" programs for sale. "Hot Pocket," "Title of the Month," and so on. These pay as you go promotions should remain; however, these programs are booked months in advance -- and they are not on the checkout. These programs do meet a definite need, but they cannot capture the spontaneity of the moment and what's hot now. There are titles and trends that are strong in bookstores and specialty outlets that do not have mainstream distribution. Niche titles are launched out of an interest and love for a topic they share with others. There is no advertising base to support expensive promotions, but if a fixture existed that could take these "orphan" titles and bring them to the public's attention, the chances of making money are favored for the wholesaler and retailer. Niche publishers create their title with love and go to press quickly. The cover price is usually high and money is made through single copy sales. The niche magazine title will be out in limited distribution months before a larger publisher has seen the popularity. Before EBITDA, and ad sales prospecting, it takes months for a major publisher to move into a market launched by a niche publisher. How to Fix a Broken Checkout System The checkouts have to be a bit more ecumenical. When I ran a department that dealt with a major home center chain, the magazine category was managed by a publisher. At annual reviews, even though a particular title was successful -- let's say a log cabin title ranked 19 in chain sales for the year -- it was removed from the mix or distribution was reduced in order to place a quarterly magazine produced by the category manager's publishing company. And often, that title did not generate as much gross revenue for the chain. A successful magazine program is like a sandlot baseball team: successful teams should be comprised of who can deliver, and not who owns the bat. And, yes, I will concede to the comment that pointed out during the week in supermarkets a number of manned checkout positions will be closed because of low store traffic. Using local supermarkets where I live, on a given weekday, if there are a total of 16 checkouts, four will be open and manned by employees, six are open for self-checkout, leaving six closed. But from Friday afternoon until Sunday afternoon, all checkouts will be open for business and using national trends over 51% of all magazine sales for the chain will be made during this time. If Robin Roberts on “Good Morning America” mentions Live Happy Magazine in a three-minute spot with the editor, consumers will look for that magazine and may go to three or four stores to find it if it is not in their store of choice. And if we (consultants) do our job correctly and notify the wholesalers about this special feature and the planned national TV mention, the wholesaler should place copies on the "Hot Title" rack or given prominent display elsewhere in the store. Is it easy to coordinate this? No. I have a couple of clients that send me advanced editorial like clockwork, focusing on key editorial highlights and local interest features, and we'll get appropriate displays in key markets and see sales increases. When Juxtapoz magazine featured Banksy on the cover, our sales in specific markets where Bansky has followings were much stronger than the average issue. Did we get placement on the "Hot Title" checkout rack? No. It didn't exist but we did get increased copies and improved displays in specific markets with wholesaler and retailer compliance. Luke Magerko, a senior data scientist for a major fulfillment company has worked extensively in studying single copy buying trends. He wrote about how consumers, when they want something, they will look for it and buy it. As evidence, he pointed out that, Coca Cola refrigerator units, a competitor for checkout placement, are not positioned at every checkout, but one per store at the front end. If you want a cold Coke, you'll find the refrigerator and buy it. I am not saying People or Star or Life & Style should not continue to have multiple checkout positions, but having one fixture that can sell hot trends when they are hot will work. All titles on the Hot Checkout do not have to cover one theme, but a variety of themes that will sell in that market. I mentioned Larry Scheur earlier in this post. He and I discussed his knowledge of the demographics of the cities he serviced. He knew that if he got a special edition, he knew which stores, in which areas could maximize sales of the title, and sales increased. If it was promoting children’s magazines (unheard of in most segments) or cross promoting books with a magazine, sales were made. All segments of the business made money: Retailer; Wholesaler; National Distributor; Publisher. To repeat what the wholesaler VP wrote "It's not about placement or rack money; it's about sale."

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There’s a Place for Trending, Niche Magazines at Checkout

John Morthanos

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