MAGAZINE INDUSTRY WARMING TO SBT: STUDY

Dan Alaimo

NEW YORK -- Magazine suppliers are getting closer to accepting scan-based trading, said Bill Bishop, president, Willard Bishop Consulting, Barrington, Ill.

Bishop worked with the Magazine Retail Advisory Council of the Magazine Publishers of America here to survey magazine wholesalers, national distributors and publishers on SBT.

"The study shows that movement toward SBT is progressing, and people have a more realistic idea of what it is going to take to get it right," Bishop told SN.

SBT eliminates check-in of direct-store-delivery goods. Suppliers maintain ownership of the inventory until it goes through the point of sale, and then bill retailers from the sales data captured from scanning systems.

The biggest benefits expected from SBT, according to the recent study, are labor savings, improved category profitability, sales growth and shrink management.

While 100% of retailers surveyed said that SBT will create incremental magazine sales, 80% of those in the magazine industry agreed.

The biggest impediments to SBT, the study found, were internal systems barriers, unclear return on investment, overall SBT complexity and the cost of a SBT pilot.

Bishop predicted that movement toward SBT will be slow, but that bodes well for both retailers and suppliers getting it right. "There's a real need to synchronize data, and that requires working closely together for a period of time before you try to do SBT," he said.

"The retailers' primary interest is reducing their costs. The suppliers' primary fear is that it will arbitrarily increase their costs and give them no benefits. That's the divide right there," Bishop said.

Assuming everything is done right, "when all the gates are passed through properly, and the data is synchronized, there's a lot of benefit for the suppliers in the process," he said.

Over the next year, Bishop predicted that one or two retailers will begin to get deeply into SBT, and it will probably be a minimum of a year or two more before a substantial number of retailers start to move into it. "So this is not going to happen right away," he said.