KROGER TESTS 'INSTANT START' MAGAZINE GIFT CARDS

STEPHANIE LOUGHRAN

CINCINNATI -- Seventy-two Kroger Co. stores here have rolled out a test program that merchandises magazine subscription gift cards, according to the Nashville, Tenn.-based supplier magazines.com.

Kroger officials did not return phone calls to SN for comment.

The program called Instant Start allows customers "to give a gift that allows [the recipient] to subscribe to their choice of magazines," said Jay Clarke, president and chief executive officer of magazines.com, the on-line magazine subscription company that created the program.

The card is merchandised in a way that targets the gift recipient's interests in specific categories rather than any one particular title. The receiver of the gift card can choose from eight to 12 titles within one of 10 themes, including cooking, family, home and garden, kids, pets, sports, teen, women's, women's health and women's fashion.

The gift cards are merchandised on clip strips in aisles appropriate to the theme, such as the greeting card aisle, the floral area or pet supplies for pet magazine subscription cards. They are also merchandised on 12-inch spinner racks as a countertop display at the courtesy desks. Swiping the magnetic strip at the checkout activates the cards.

Clarke said, "Retailers are always looking for ways to cross merchandise magazines." He said Cincinnati-area Kroger stores quietly rolled out the cards last fall without promotion, and he has been surprised by their success.

"We've seen quite a lift in the past few weeks surrounding Christmas," said Clarke. He partly attributes their success with attractive price points for grocery stores, ranging from $12 to $18.

Upon receiving the gift card, the recipients can call a magazines.com toll-free 1-800 number to verify their pin number, choose a magazine and begin the subscription process, according to Clarke.

The profits from the gift cards are split four ways among the retailer, wholesaler Anderson News, Knoxville, Tenn., publisher and magazines.com. Clarke said he is in negotiations to market the cards through three other major wholesalers: Charles Levy Circulating Co., Chicago; Hudson News Co., North Bergen, N.J.; and The News Group, Fife, Wash., operated by the Jim Pattison Group of Vancouver, British Columbia.

Clarke also told SN that the gift cards would be merchandised at an undecided number of Wal-Mart stores for Mother's Day 2001. He sees the gift card especially beneficial as seasonal in-and-out programs, for gift-oriented holidays like Father's Day, Valentine's Day and graduation time.