GIANT EAGLE TESTS ONLINE 'MAGAZINE NEWSSTAND'

MARK HAMSTRA

PITTSBURGH -- Giant Eagle here is one of a handful of retailers who recently began testing a new online magazine sales service that allows customers to order both current and back issues from the retailers' Web sites. Marsh Supermarkets, Indianapolis, also is testing the service, which is provided by Magazine Connection, Dallas, and other supermarkets are reportedly considering adding it to their online offerings.

Ian Knott, marketing director for Giant Eagle's Web operations, said the new service could eventually tie in with the chain's in-store magazine departments.

"At this point we're not promoting it in the store yet, because we want to make sure they stay in business," he said, noting that companies based on Internet retailing sometime have a pretty short shelf life.

Knott said the immediate goal was to "add value" to the chain's Web site so that more customers would get in the habit of visiting on a regular basis.

"What you really want is a lot of eyeballs on your Web site," he said. "But, you don't want a lot of eyeballs if you're not adding value for your customers."

One of the main advantages of using the online magazine-sales service is that it allows Giant Eagle to be able to provide recent issues that a customer might have missed in the store.

Ben Martin, director of online newsstands, Magazine Connection, which is operated by magazine distributor Cable News Co., New York, said the company currently carries about 1,500 magazine titles. Plans call for increasing that inventory to about 4,000 different titles, however, he said.

In addition, the company also is expanding into books and calendars, and plans eventually to offer 18,000 stockkeeping units of merchandise altogether, including back issues. Customers also can order subscriptions from the site.

"Giant Eagle has been doing great" with the service, Martin said, although he declined to reveal specifics about traffic or order volume. Retailers receive commission of 10% to 20% per order.

The online newsstand is a turnkey operation for the retailer, Martin said, although Knott pointed out that the two companies spent a lot of time planning the site before it actually launched about a month ago.

Magazine Connection provides the technology and sets up the site to appear as though it is operated by the retailer. Visitors to the retailer's site link to the magazine sales site through a button on the retailer's home page.

On the Giant Eagle home page, a link under the heading "Online Services" takes visitors to a page labeled "The Magazine Newsstand" and topped by Giant Eagle's logo. Last week the site was offering a free magazine from a list of promotional titles with the purchase of any other magazine.

Customers pay $1.25 for shipping plus 25 cents per issue, and orders received by 3 p.m. each day are shipped the same day, according to Martin. Magazine Connection maintains a fulfillment center in Oregon, Ill.

At Marsh, the site is almost identical, although Marsh has taken the extra step of creating a special logo for the page that incorporates some magazine graphics and labels the page as the "Marsh Newsstand."

Officials at Marsh could not be reached for comment.

Anne Finn, vice president, consumer marketing, Magazine Publishers of America, New York, said she was encouraged by the tests.

"We're always interested in any innovative merchandising programs," she said.

At Giant Eagle, Knott said the company also was implementing other changes to its Web site, including switching its online recipe service provider to Grocery Shopping Network, Eden Prairie, Minn., from previous provider Meals.com. Giant Eagle plans ues the recipes "as platforms to launch promotions," he said. The service was expected to become available this month.

He said Giant Eagle hopes to register "a few hundred thousand" customers at the site by year-end, and has a goal of 500,000 page views per week.

"The idea is to get customers to check the site on a weekly basis before they go to the store," he said.