MAGAZINE INDUSTRY TO FIGHT FOR RETAIL SPACE 2004-04-19 (2)

Dan Alaimo

WASHINGTON -- The magazine industry is getting ready to rumble.

Through trade groups like the Magazine Publishers of America, New York, the industry's publishers, wholesalers and national distributors -- supported by some respected consultants -- are readying a comprehensive marketing plan to convince retailers anew of the importance of magazines to their product mix.

"We plan to take the program to our nation's largest retail chains -- supermarkets, mass merchants, drug, convenience -- through face-to-face meetings between top retail executives and publishing chief executives, at their headquarters and at industry events," said Michael Pashby, executive vice president of MPA, which held its Retail Conference here recently.

"For too long we've apologized for the negatives of our industry, but we have a wealth of positives to brag about. The pluses are overwhelming," he said.

Among the many elements of the program is a unified industry outreach to retailers, to develop new and more effective display fixtures, to regain merchandising ground lost in the self-checkout lanes, and to experiment with new display formats, such as media centers combining magazines, books, music, video, video games and other related products, Pashby said.

The industry also needs to get its products into new classes of trade, such as the warehouse clubs, he said. "A priority for us is to understand the requirements, the priorities and business models of these growing channels, and to think creatively about the best strategy for magazines. We shall take action to test alternate retail models for these channels and turn these tests into profitable and sustainable practices," Pashby said.

Share of market by channel is changing, noted Thomas Ryder, chairman and chief executive officer, Reader's Digest, Pleasantville, N.Y. Mass merchandisers and bookstores have grown dramatically in recent years, while convenience stores have declined, newsstands have increased slightly and supermarkets have stayed the same, he said.

"That retail landscape where we live continues to change. Consumers are embracing new types of retailers. Where are our magazines in Costco and Trader Joe's? We need to create a fit there," Ryder said.

The magazine industry needs to develop a strategic focus to spur demand rather than concentrating on supply chain issues like it has in the past, he said. "We must undertake bold new initiatives to increase magazine relevance and importance to retailers. We must as an industry figure out how to encourage and convince retailers to give magazines the position they deserve," he said.

Peter Kreisky, chairman, Kreisky Media Consultancy, New York, said the magazine industry has been so focused on fixing the supply chain that it has taken consumption for granted. "Stimulate demand and many of the financial woes plaguing the supply chain melt away as more fixed costs and technology investments get covered. Stimulate demand and sell-through efficiencies will improve. Focus on pull rather than push and you'll find that consumers will want to buy the magazines that you put in the stores," he said.

Magazines are such a unique category for many retailers that they fall into the trap of focusing on differences and problems, rather than "celebrating magazines as a valuable asset," Kreisky said.

Publishers, wholesalers and national distributors need to take a message to senior retail management "that will raise the visibility of magazines and convince skeptics of magazines' importance," he said.

Magazines also have entertainment value by their very presence in the store. "Research shows that for every magazine purchaser, there are as many as six customers who browse but do not buy. For them the value of magazines is free entertainment. And those who browse, but do not buy, are often secondary shoppers" like men and children, he said.

Retailers need to be reminded that magazines' inventory is often provided at no up-front cost and the store labor involved in merchandising is minimal because the wholesalers or national distributors take care of it, Kreisky said.