Category management is finally hitting the magazine racks at supermarkets to varying degrees.
The focus has now shifted to the demand rather than the supply side of the business.
One example is the The News Group, Charlotte, N.C., a division of the Jim Pattison Group, Vancouver, British Columbia, which services 12,000 dealers in the Southeast, including Kroger KMA Atlanta; Harris Teeter, Charlotte, N.C.; Ingles Markets, Black Mountain, N.C.; Publix' Atlanta division; Winn-Dixie Stores, Jacksonville, Fla.; Food Lion, Salisbury, N.C.; and Hannaford Bros., Scarborough, Maine. Grocery chains represent approximately 65% of the wholesaler's business.
Within the last eight months, the distributor has invested about $200,000 in a category management initiative that involves partnering with publishers to manage the retailers' magazine departments or segments of the category through the Apollo space management software that has been customized for magazines.
The company represents in excess of 4,500 titles, of which between 600 to 700 generate 90% of sales, said Mike Sullivan, The News Group's executive vice president of sales and marketing.
Magazines have been categorized into three basic headings: male, female and unisex. The category is then classified into 10 subcategories and 52 subsets.
Ziff-Davis Publishing, New York, which publishes 16 computer titles representing close to a 58% of the market share in the computer magazine field, is working with The News Group to manage this segment of the business at retail. "We are looking to form strategic business alliances where publishers can help us manage a category," said Sullivan.
Besides Ziff-Davis, the wholesaler also is negotiating with Hearst Corp. and Time Distribution Services, both based in New York, to manage segments of the business, said Sullivan.
Targeting various subsegments of the category allows the wholesaler to micromanage individual accounts.
In working with Harris Teeter, the wholesaler was able to cluster stores by demographics and select appropriate titles for both mainline and front-end racks.
"Our job is to make sure we drive sales as efficiently and effectively as possible. That is how we will remain the retailers' preferred wholesaler," said Sullivan.
