NEW YORK -- Emboldened by new insights into magazine single-copy sales, Time Inc. here is pushing to change the publication cycle for its People magazine back one day to gain pre-weekend display for the title.
The decision, which would affect the magazine's entire publishing and distribution chain, has been prompted by retail category-management studies done with several supermarket chains, said Cam Cloeter, senior vice president of sales for Time Distribution Services, the magazine publisher's retail marketing arm.
"We will spend $19 million over the next five years to change People's editorial closing time, manufacturing and distribution," Cloeter told SN.
He said the purpose of this effort is "to get the magazine to wholesalers 24 hours earlier, so it can be delivered to stores on Friday afternoon instead of on Monday morning."
Cloeter said this seemingly simple change is expected to have a significantly favorable effect on single-copy sales for People, which was the nation's eighth-largest magazine in newsstand sales, selling an average of 1.3 million copies per issue in the first half of 1996, according to the latest figures available from the Audit Bureau of Circulations, Schaumburg, Ill.
For the full year of 1996, People ranked first in total advertising revenues, at $525.6 million, up 20% vs. 1995, according to the Publishers Information Bureau. People is regarded as one of the most profitable magazines in America for both wholesalers and retailers.
"In stores we tested this in, we got a 15% increase on People magazine," said Cloeter. Projected nationally, that would translate into about $30 million in incremental retail sales for the title, accomplished without spending on new racks or resets, he added.
The tests were conducted last fall as part of category-management studies at three supermarket chains across the country. Cloeter declined to name the chains.
One way to put that sales increment in perspective is to compare People's single-copy sales to those of the roughly 4,000 other titles sold on newsstands currently. "A 15% increase on People would be equivalent to the combined sales of the lowest 1,150 titles," Cloeter said.
The single-copy sales increment is generated by putting the freshly published issues on the front-end racks of supermarkets and mass merchants on their heaviest shopping days -- Saturday and Sunday, he said.
Currently, People's heaviest sales days of the week are Monday through Wednesday. Under the current schedule, by the time the weekend rolls around, the issue is somewhat stale and many copies are no longer in prime condition.
While the change is designed to meet consumer shopping habits, meeting the new delivery target will have enormous consequences on People from an editorial, advertising and manufacturing perspective, Cloeter said.
"We are really putting our money where our mouth is. We have to push for time from our printing plants. We have to negotiate with logistical companies. We have to negotiate with our writers."
He added, "Moving back 24 hours will change people's lifestyles and the days they work."
Cloeter said that two other Time Inc. titles, Sports Illustrated and Entertainment Weekly, are already printed in time to take advantage of Friday delivery. However, wholesalers have not traditionally operated their delivery trucks on Fridays, a custom that evolved to accommodate the publication schedule for Rupert Murdoch's TV Guide.
"Wholesalers are understandably not too fired up about adding Friday deliveries," said Cloeter. "As part of this, we must reconfigure how they are compensated."
He added, "As the world changes, magazine publishers find ourselves competing with new media. We believe that to be successful in print, we will have to continually push the envelope relative to having fresher and fresher product."
The results of the People decision are sure to be closely watched by other magazine publishers and the rest of the magazine distribution industry, which has undergone much consciousness-raising in the wake of the dramatic re-engineering and consolidation of magazine wholesaling that has taken place since 1995.
TDS has taken a leadership role in the push for category management in magazines, and its collaborations with retailers have yielded other insights and best practices that it is currently promoting to accounts under the umbrella, "Cover Story."
TDS's analysis of the magazine industry has yielded several key insights that inform its category-management philosophy, Cloeter said.
For example, one-half the sales on so-called "mainline" racks in retail stores are generated by 13% of 800 or so newsstand-distributed titles, while 75% of mainline sales come from 29% of the titles. This has implications for optimizing assortments.
Magazines are also a unique product in that they are highly sensitive to local shopper demographics, and their sales patterns may also serve as indicators to retailers about shopper behavior. Cloeter said TDS hopes an improved flow of category data may open profitable avenues for interaction with retailers.
"If we can understand the consumers -- how and why they buy things -- we are willing to invest heavily," he said.
Accurate consumer information on single-copy sales will depend on a reliable flow of store syndicated data, which is not yet available.
"Some data has been available from the wholesale level, but there is a lot of lag time. Also, it resides in various computers, which makes it difficult to unify the information," said Cloeter.
He added there is an expectation that gaining a better hold on category management and accurate point-of-sale data will help publishers reduce press overruns and limit the handling costs associated with the consignment nature of magazines.
"Our single biggest cost of doing business is unsolds, exceeding the costs of racks, performance payments, our sales force, etc.," he said.
"If we can work with retailers to understand this we are more than willing to share the benefits with the channel. We think together we can reduce expenses, while maintaining and driving sales."