Revitalizing single-copy sales

Diane Reese

No doubt about it, 1985 was not a good year at the newsstand. From women's to weeklies, magazine sales were mediocre at best and often worse, although the addition of new titles and specials helped to keep unit sales from sinking out of sight.

To hear some distributors tell it, single-copy circulation has been the forgotten stepchild of magazine publishers for an inexcusably long time. The neglected child, they say, finally got sick. But as often happens when trouble hits--especially in the pocket-book--the adrenaline starts flowing. Members throughout the distribution channel are putting their heads together to find a way out of the single-copy slump.

On the most immediate level, many publishers, national distributors and wholesalers say they are pursuing a rigorous "back to basics" approach--getting the right number of copies to the right places at the right time, keeping racks stocked and neat, working extra hard to produce eye-catching covers and valuable editorial.

For the long term, however, they are trying to move forward (some say trying to come into the 20th century) in their efforts to be more innovative, sophisticated marketers. Although magazines are by nature a vital, ever-changing product, the industry has not conveyed that message either to retailers or consumers through exciting merchandising and promotion programs. Nor has the industry convinced retailers that magazines are a must-have product in their stores.

In short, plenty is going on in the industry to help boost single-copy sales. Individual efforts abound--many examples follow--and industry-wide efforts are beginning to gel. But much more is needed, participants readily admit. And, of course, they as readily offer suggestions.

What's the problem?

Newsstand sales have undeniably weakened, although the severity of the slump is open to debate. Wholesalers had become spoiled by annual dollar volume increases of 10 percent or more--escalating cover prices helped ensure that. In the last quarter of 1984, however, those increases slowed dramatically. For the entire first half of 1985, wholesalers had to swallow only 2.6 percent growth, and the picture has not improved much since.

Some magazine categories are hurting more than others. Newsstand unit sals of ABC-audited men's "sophisticates," for instance, plunged 10.5 percent in the first half of 1985. (Include nonaudited sophisticates, and the total may be closer to 30 percent.) Weeklies were off 5 percent, and the "Seven Sisters," all big newsstand sellers, also dropped collectively by 5 percent. In other categories, sales have been a mixed bag, or even strong.

What is causing the slump? Single-copy executives have a list of ready reasons, some rooted outside the industry, some within. One culprit is mentioned so often it has become a cliche: the VCR. It is estimated that one of every three American homes now have a VCR. Video movies, and other new forms of entertainment such as cable TV and Walkmans, are competing head to head with magazines for consumers' precious leisure time.

Lifestyle changes, including the mad pursuit of physical fitness and the pressure cooker of dual-career families, are also affecting newsstand sales, executives say. Working women especially are modifying their habits. Not only do they have less time to read, but they are going less often to the supermarket, a prime magazine outlet.

Another reason for the continued slump--and a constant gripe of newsstand executives--is the growth of cut-rate subscriptions. "That guy on TV is telling me and all my customers that we're jerks to buy a magazine at retail," fumes one wholesaler. When newsstand sales began to dwindle and rate bases to crumble, distributors say, publishers should have plowed money into promoting their single-copy business, instead of spending it on giveaway subscriptions. A classic chicken-or-egg situation.

Indeed, the word "promotion" opens up a whole can of worms about what is wrong with newsstand sales. Many of the problems, admit publishers and distributors, can be found in the industry's own back yard.

Magazines are in a constant tug-of-war with other nonfood products for retail display space, both at th checkouts and on the mainline racks. In terms of profitability, magazines can stand up with the best of them. But what is lacking, admit all members of the distribution chain, is the marketing savvy--here comes another chicken-or-egg--to convince consumers to buy more magazines, and retailers to stock more magazines. The publishing industry must become more adept at merchandising--bot to pull consumers into the stores and to push the product through the retail system.

"The chains keep saying to me, 'Why is your industry so antiquated? Why aren't you being more of a merchandiser and less of a stevedore?'" comments James Littlepage, president of Denver News Co., a well-respected wholesale agency known for its in-store service. Like other wholesalers, Little-page faults publishers for not aggressively marketing magazines.

Ike Bay, co-owner and vice president of Bay News Co. in Oregon and president of the Pacific Coast Independent Magazine Wholesalers Association, seconds Littlepage: "We've got to do things that are more commoin in other industries but are not common in our industry," he says. "In the eyes of retailers, magazines are boring--because we've never taught them that 12 issues of Cosmo is exciting. The retailer thinks, 'I've got 12 feet of magazines and it's just as static as my canned soup and pickle departments.' We haven't featured the variety, the ever-changing nature of it, to the customer, and to the store."

Again, why is that so? Money. Laziness. Parochialism. Rivalry. The periodicals distribution system is incredibly complex--2,600 publications, 10 national distributors, 400-plus wholesalers, thousands of retailers. Getting a chain like that to swing smoothly is no small feat. Its members want for themselves, ideally, a unified strategic marketing plan. At the very least, they want an ongoing, generic, national advertising campaign to promote publications.

"You've got all the dairymen advertising to drink milk. The Iowa Pork Council does it, the California Avocado Association.... These are really aggressive groups. They're beating our pants off," Bay remarks.

Some progress is made

Efforts are underway and progress is being made to better the state of the newsstand industry. The segments are talking to one another, listening to one anothers' problems and concerns, mutually considering strategies for growth. "Now we can agree to disagree," says Robert Alexander, vice president, circulation of CBS Magazines and chairman of the International Periodical Distributors Association (IPDA). While all that sounds rudimentary, indeed logical, it is truly a big first step for this industry.

"All of us on the newsstand side of the industry share a genuine concern about the future. One of the remarkable aspects of this concern has been a lack of finger pointing, a lack of search within the industry for a convenient culprit," Robert Sakariassen, president of the wholesalers' Council for Periodical Distributors Associations (CPDA), told attendees at the wholesalers' big annual convention last October, sponsored by the Mid-American Periodical Distributors Association (MAPDA).

What, then, is being done by the industry as a whole to help newsstand sales? Perhaps the most significant project to emerge from this new unity is the study on direct product profitability (DPP) now being conducted by Touche Ross & Co. for the Magazine Publishers Association (MPA). DPP is a state-of-the-art method for evaluating a product's contribution to a store's profitability. (A computerized cost modeling program calculates DPP based on a product's direct handling costs. See FOLIO:, November 1985, page 27 for a full description.)

Major retailers are now using DPP to make product mix and space allocation decisions, instead of relying on simple measures of gross margin. Because magazines are expected to compare very favorably to other products on DPP, they should gain a critical advantage in securing display space. Is the MPA DPP study important? "No doubt about it, if only for having a good defense," says Robert O'Donnell, director of marketing and promotion at Time Distribution Services.

But the study is not only a major investment by the industry in single-copy sales (MPA members pledged at least $400,000 for the study and wholesalers another several thousand), it also sets an example. Research in many areas affecting the newsstand is pitifully lacking, distribution executives say. The DPP study illustrates what can be accomplished when the industry pools its resources and sets a course.

Other joint efforts

Other important joint projects are going on in the industry right now. IPDA and CPDA are cooperating on various research assignments that grew out of a set of intensive meetings between members of the two organizations last year. The task force identified several key subjects for which no good research is available. Some of the research projects expected to be tackled this year, according to IPDA president Quentin Harvell, include the following:

* An accounting of the kinds of instore service that individual wholesalers provide. Once that is inventoried, distributors and wholesalers will be better equipped to determine how to provide more adequate in-store support; to pinpoint where such support is needed; and to determine who can do it.

* A before-and-after test within individual agencies to compare sales when limited in-store service is given, to sales when more frequent rack maintenance is given.

* A study of the effects of new shopping patterns on publication sales. With consumers now more apt to make several quick shopping trips instead of one big weekly excursion to the supermarket, the impact of this smoothing of the purchasing cycle needs to be assessed.

* Research to determine the best location for magazine reading centers in relation to front-end check-outs.

* A study of the effects of cross-merchandising on sales.

"There is no standardized research on all of this," Harvell notes. "There's a world of possibilities out there. Of course, it takes big bucks."

At this writing, these studies' details, budgets and participants have not been determined, but Harvell says the group will concentrate in 1986 on small-scale research projects that can be completed in two to six months.

IPDA is also conducting the second wave of an important study documenting that daily rack maintenance by retailers both improves publication sales significantly, and is cost-effective. The goal is to convince retailers with hard evidence that, if they assign instore personnel to take care of the racks, they will ultimately profit. While distributors have long known that good rack detailing increases sales, the effects have never been adequately quantified, Harvell points out.

The first test was conducted last year in 10 Kroger stores in the Louisville, Kentucky, area. An independent research firm, Audits & Surveys Inc., was hired to perform the rack maintenance and monitor the results. According to IPDA, sales increased roughly 50 percent across the board. The results so surprised even the distributors that they are repeating the test in another site to verify the outcome.

"With that research, and the DPP study, we'll have a good set of figures to convince retailers that books and magazines are a profitable category," Harvell predicts.

A final, nearly complete project that IPDA is working on is an audio-visual presentation promoting publications. The presentation is designed to be shown at regional retailer conventions. Because many of these regional and local retail managers do not attend the big trade conventions sponsored, for instance, by the Food Marketin Institute or the National Association of Convenience Stores, they are not reached by the magazine presentations there. The IPDA effort is an attempt to reach this second tier of convenience, drug and supermarket retailers.

Not to be left out: Concept One

If DPP is the most immediately beneficial project in the works, "Concept One" has to be the most far-seeing. Concept One is the brainchild of the wholesaler community, specifically of independent distributor Ron Scherer and the MAPDA leadership. It is a proposal for the development of a long-range strategic business plan requiring industry-wide cooperation and implementation. (See FOLIO:, January 1986, page 23.) Utopian as that may sound, optimists in the business say it is exactly what the industry needs. Its chance of success is another matter.

"It has good possibilities ... There's nothing there so extraordinarily new that we can't embrace it," asserts John E. Fitzmaurice, president of Periodicals Institute, which Concept One's developers hope will assume the project's day-to-day leadership. (PI's board of directors considerd the request initially at a November meeting. No decision was reached, pending further discussion of the plan between IPDA and the Concept One leaders. "My guess is that it will fly in some form," Fitzmaurice said shortly after the board meeting.)

Whether Concept One flies or fizzles, it has helped focus industry leaders' brainpower on ways to improve the distribution channel. Great food for thought, so to speak. Remarks Playboy's Richrd Smith: "One of the things we do in this business is we're always putting out fires. If we were a little more far-seeing ... our lives would be a little more tranquil."

Individual efforts

But back to the here and now. To worry about improving the whole distribution channel while scrambling to save your own sales is not easy. What, then, are companies doing within their own operations to combat the slump? Have they changed strategies since sales softened? Do the publications unscathed by declines have a special weapon? Chances are they wouldn't reveal it if they did--if nothing else, the single-copy sales business is fiercely competitive and secretive.

For the most part, publishers, national distributors and wholesalers say they are doing many of the same things they have always done, but they are doing them more thoroughly.

"It's retrenchment, back to the basics--getting the right number of copies to the right outlets at the right time--that we've been doing," says Time Distribution Services' Bob O'Donnell, describing their strategy for battling the slump.

"The basics," grossly oversimplified, means convincing retailers to carry their product and consumers to buy their product, and performing the mechanics of getting the publications out on the racks. The industry members who spoke to FOLIO: described an assortment of techniques for accomplishing this, running the gamut from television advertising to temporary cardboard displays.

Retailer 'incentives'

The key to success in the single-copy business, publishers and distributors point out, is getting the product displayed to advantage. If the customer can't find the product, he can't buy it, and because magazines are generally considered to be impulse items, they must be easy to find. The topic of display causes much frustration among members of the distribution contingent. There's never enough of it, it seems, and what there is is usually poorly tended.

The biggest battles for display turf, of course, take place at the check-out. "When you talk check-out, you're talking the greatest selling real estate in the store," says fitzmaurice of Periodicals Institute. "Merchandising there is keeping those pockets full. There's not a lot of necessity for stars and stripes and banners."

Most of the check-out space has long been sewn up by about 20 top sellers such as Family Circle, Woman's Day and TV Guide, but there still is some jostling, both to get on the racks and to get a better position. Here, not surprisingly, money talks--and with the rough single-copy market it has been talking louder than ever, in the form of souped-up retail display allowances (RDAs) and lucrative per-pocket payments made to the retailers for the right to occupy the real estate.

Conde Nast Publications, Inc. and The Hearst Corporation, for instance, have been squarely in the middle of the check-out battle. Both introduced new retailer incentive programs last year that offered high pocket payments for superior front-end display.

Hearst's plan, called the "four star power program," pays retailers to display Good Housekeeping and Country Living together, and Cosmopolitan and Redbook together, at alternating check-outs. The plan's obvious goal is to boost the weaker check-out titles--Country Living and Redbook--into good position by mandatorily linking them with Hearst's blockbusters.

Conde Nast calls its plan "quarterly plus." Its unique feature is that retailers earn both a standard 10 percent RDA on each copy sold plus a per-fixture quarterly payment for displaying Glamour, Vogue, Mademoiselle and Self in the upper 50 percent of the check-out rack. The retailer has an extra incentive built in there because his RDA earnings rise as sales go up.

Although per-pocket RDAs have been used by publishers for years, these latest twists do seem to take the stakes even higher and tend to make RDA computations more complicated than they already are, notes one RDA consultant. Wholesalers, too, tend to look askance at some of these juicy incentives.

"One thing we are not enthusiastic about are up-front payments used to guarantee position," comments H. Paul Davidson, vice president, general manager of Chicago wholesaler Chas. Levy Circulating Co. Such payments, Davidson asserts, cause two problems: They distort the selection of what should be the best mix of front-end titles, and they often fail to benefit the store managers because they payments go into a corporate fund at chain headquarters.

Cultivating the retailers

There are also other, more subtle, tactics being used to curry retailers' favor. Conde Nast is a master in this area, too. The company has a reputation for dedication to the pursuit of single-copy sales--nearly two-thirds of its total circulation comes from this source and its record during this slump is enviable: Every one of its publications registered newsstand sales increases in the first half of 1985, with the exception of The New Yorker, which it only purchased in May.

Conde Nast has achieved that success in part, according to Michael Garavalia, newsstand sales manager, by aggressively cultivating the retailers. "We have to make the retailer understand that magazines are an excellent product with excellent turns, and that if the retailer becomes involved, he can make a lot of money," Garavalia explains. "To do that, we work with the retailers to enhance their knowledge of what magazines offer."

Two years ago the company developed a video presentation for retailers on the "basic rules of magazine merchandising." As a follow-up, last year it published a set of four 12-page booklets giving tips on ways in which retailers can increase their magazine sales. Each booklet addresses a different segment of the retail trade: supermarkets, convenience stores, drugstores and bookstores--the key outlets for Conde Nast's magazines.

Garavalia considers this ongoing educational program an important tactic in the company's strategy to keep newsstand sales bubbling. The booklets first ran as inserts to business magazines serving the retail and distribution communities. They generated enough inquiries to require a reprinting--20,000 have since been distributed to wholesalers and retailers. Says the manager: "We've got to create an excitement around the category because it's viewed as stagnant, as dying, and it's not."

Esquire also has been paying more attention to the retailers since the softening in newsstand sales. One thing it did was to launch a bimonthly newsletter. The newsletter is subtle in its sell: It provides information from Esquire, such as travel tips and gems for cocktail conversation. "The point," says Ron Murray, field manager, single-copy sales, "is to keep Esquire in the retailers' consciousness." With about 2,600 magazines out there vying for space, it is easy to get lost in the maze, he notes.

Work with your wholesalers

Since the slump hit, Petersen Publishing, publishing of Motor Trend, Hot Rod, Skin Diver and other special interest magazines, has been making a special effort to cultivate wholesalers and work with them individually to find ways to improve sales, according to Nigel Heaton, vice president, circulation director.

Drawing on the company's computer database system, Heaton constructed an extensive business profile of each Petersen title's performance in 102 key markets. The profiles include data on sales and draw by issue and title, number of dealers, type of outlet, competitor's sales, and so on. The Petersen staff then slowed the profiles to the wholesalers who service those markets and asked them for an assessment of each titlehs growth potential.

"We said 'help us,'" Heaton explains. "If you let them share some of your objectives, amazing things start to happen. You find that their concerns are the same as yours. They know efficiency is needed, and they start to say 'I can do this to this title.'"

Together Petersen and its wholesalers have begun to develop regional joint merchandising plans, according to Heaton. The results, he says, have been "astounding." For example, the business profile of Drag Racing for the Washington, D.C., area showed that it was the 76th best-selling title in the market--a result even Heaton thought was ludicrously terrific. Based on the obvious potential for the title there, the wholesaler agreed to accept bigger allotments of Drag Racing and to increase distribution to more outlets. The upshot was a 600 percent increase in sale on the $2.95 title, according to Heaton.

Petersen's experience illustrates not only the value of fostering a partnership attitude with the rest of the distribution chain, but also the value of digging deeper into sales and market information than many publishers generally do. Time Distribution Services' O'Donnell points out that, in order for them to do "the basics" better, their information needs go way beyond the traditional sales and returns information that comes in from the wholesalers. Such data tell what is hapenning, but shed no light on why. Publishers must get down to the retail level, O'Donnell explains, and look at sales in relation to class of trade, store size, location, and so on.

Pulling in the consumer

Ultimately, however, it is the consumer who turns newsstad sales on or off. Therefore, how are publishers and distributors trying to reach the consumer more effectively, now that sales are drying up?

"We have to be better, friskier, more wonderful each month," the reigning queen of single-copy sales, Cosmopolitan's Helen Gurley Brown, said recently when asked what she is doing to stop Cosmo's slippage at the stands. Like Brown, many publishers are re-examining their products, looking for shortfalls that may have turned readers away, or searching for ways to add better value.

"Consumers are more selective than they had been. We're competing for their time and dollar--they're picking and choosing among a lot of other activities. You have to be sure the reader is getting his dollar's worth," explains Hugh Crocker, circulation director for Triangle Publications Inc., which publishes TV Guide, the largest newsstand seller.

Heaton at Petersen tells of his company's efforts to give the reader more bang for the buck. "Internally we work as hard as we can on the product," he reports. "Perceived value is very important. Am I delivering a package that the retailer and consumer want to pick up in that maze of titles?"

Petersen has taken two specific actions to ensure that it is. First, it invested in more editorial pages by adding special 16-page inserts to certain titles, while keeping the cover price the same. For instance, in Skin Diver it inserted a pull-out section titled "Learn to Dive," and drew attention to the section with cover blurbs. Sales of issues with the bonus sections went up by as much as by 30 percent, Heaton claims.

Second, the publisher has focused special attention on creating more effective covers and story blurbs. The circulation department has always signed-off on the covers, but once sales started to decline, that control was expanded to the table of contents as well. Together the editorial and circulation staffs now work on choosing cover subjects, designing the covers and coming up with spicy blurbs. Heaton says the extra attention has yielded a "dramatic" improvement in covers.

Cut the price

Some publishers are trying to give the consumer more value by using methods inspired by standard packaged-goods marketing techniques: They are cutting the price, either directly or through the use of cents-off coupons.

Family Media Inc. has cut prices on two of its newly acquired titles, Savvy and World Tennis. The move marks a return to an unusual strategy that it used successfully on its former flagship, Ladies' Home Journal (recently sold to Meredith Corp.). Starting in 1982, it gradually rolled back the price of Ladies' Home Journal from $1.50 to $1.19, trying to entice more readers to sample the magazine. Once newsstand sales built to the level management sought, the price was gradually rolled back up to $1.50.

The sampling strategy paid off--the magazine sold more copies at $1.50 than when 75 percent of the country was as $1.19, according to Mike Senior, newsstand sales director--so he is trying it on the other titles. The cover prices of both Savvy and World Tennis have been dropped to $1.19. To make sure readers are aware of the bargain, the old cover price is shown crossed out and the new price is flagged with the words "extra value."

Rodale Press has been testing another kind of price promotion--couponing--on its digest, Prevention. According to Richard Alleger, single-copy sales manager, cents-off coupons for Prevention were distributed in five markets in conjunction with supermarket chainstores there. The coupons were passed out to shoppers at the stores singly or on sheets with coupons for other products or as part of the stores' advertising fliers. Conclusive results were not yet available, but Alleger says preliminary returns "looked good."

Periodicals Institute has also orchestrated several in-store coupon promotions in the past, and president Jack Fitzmaurice is a big believer in such tactics. The coupons, which offered the consumer 20 percent off the cover price of any magazine or book, drew an average redemption rate of 20 percent, according to PI.

A couponing system that has caught the interest of ICD/Hearst and its president Frank Herrera takes target marketing right to the cash register. With this new system, a small printer attached to each register and linked to the electronic UPC scanner is programmed to dispense a coupon whenever the scanner shows that a competitor's product has just been purchased. For instance, if a customer buys a six-pack of Pepsi, a coupon for Coke pops out of the printer. And if the customer also buys a copy of Family Circle, for example, she may be met with a coupon for Hearst's Good Housekeeping.

ICD/Hearst is testing the program through its developer, Connecticut-based Catalina Marketing Corp., which began installing the device in supermarkets last July. Ralph's Grocery Co. and Boys Markets, both West Coast chains, were the first to test the system, according to Catalina. Ralph's recently agreed to go chainwide with the system to all 126 of its stores.

In-store service

Most magazines never make it to the check-out. For them, getting noticed on the mainline racks is their daily struggle--especially when two-thirds of the cover is hidden from view and the racks are a mess.

"The mainline needs merchandising activity and constant attention," says PI's Fitzmaurice. "The greater activity in the world is for store personnel to be assigned to check the racks a couple of times a day, refilling and straightening them." Fitzmaurice claims that retailers will see sales climb from 25 percent to 40 percent just by doing that.

But beyond simple rack maintenance, publishers and distributors try to bring attention to their product with point-of-purchase promotion, typically with shelf-talkers, signage, free-standing cardboard displays and countertop units.

While no one disputes that in-store service and point-of-purchase promotions can boost sales, there is a constant tug-of-war over which member of the distribution chain should initiate and carry out the promotions. "Presentation to the consumer is the hardest to maintain," admits Triangle's Hugh Crocker. "Publishers wrestle with this all the time. Many push the idea of in-store service on the wholesaler. The wholesaler says the retailer should do it ... I think it's a question that will be unresolved."

Many of the larger publishing firms have a field force to buttress the in-store service that their distributor and the wholesalers give their titles. Some smaller publishing companies are finding that it pays to field their own force.

Esquire, for example, recently established its own field staff, after having previously used the services of parent 13-30 Corporation's field force one week of each month. Now its representatives visit 60 to 70 retailers a month in the top 10 markets, placing point-of-sale materials, checking on displays, and so on. Before it had a field staff, Esquire got full-cover display in 65 percent to 70 percent of the outlets the staff now visits. Today it gets full-cover display in 90 percent of those stores, claims Ron Murray.

Free-standing "dumps"

Many publishers and wholesalers say they like to get extra display mileage for special issues or annuals by using temporary cardboard "dumps" that stay up for two to three weeks and are then discarded. Especially for magazines whose only home is the mainline rack, these in-and-out displays offer a rare chance for point-of-purchase promotion.

When NBC brought back "Alfred Hitchcock Presents...," for instance, Davis Publications, which publishes Alfred Hitchcock Mystery Magazine, jumped at the chance to capitalize on the publicity with a special display for the magazine's November issue. The opportunity was especially lucky since the 30-year-old digest's newsstand sales had been deteriorating steadily.

A special cardboard display rack that could sit on a counter or be attached to the front shelf of a mainline rack was developed with the help of Periodicals Institute and Waldenbooks, which used the display in about 950 stores. The display included a four-color Hitchcock poster as the header and came pre-packed with 16 copies of the $1.95 magazine.

"We wanted to make it as easy as possible for the wholesalers to put out," says Louise Mugar, circulation director, retail marketing for Davis. Besides Waldenbooks, another 2,000 wholesaler-owned bookstores carried the display. NBC shared the cost of the promotion with the publisher.

Wholesalers often use temporary dump displays built around a special theme to generate in-store excitement for publications and some extra sales mileage for a group of titles. Chas. Levy, for instance, is developing a program using temporary magazine and paperback displays with the theme "Do Chicago." The company is planning the promotion in cooperation with hotels and other tourist centers that do not normally display magazines.

Dump displays are not without their problems, however. Because they are usually free-standing, they sometimes end up pushed to a corner by an ambitious store clerk with a broom. The permission of the store manager also has to be secured before a dump can be set up, and that can be a problem. Retail chains in general are becoming more reluctant to take dumps because of the space requirements.

Some wholesalers have developed more permanent, but still movable, displays that can be rolled in to block off an unused check-out lane. Chas. Levy, for example, recently began testing a lane blocker program in 110 theme, such as back-to-school or Halloween, and stocks the fixtures with magazines, books, cassette tapes and other products related to that theme. The blockers provide a chance for publications to gain additional display space at the covered front end.

Cross-merchandising

Publishers and distributors have long tried to tie in the sale of publications with other store merchandise through cross-merchandising. Some have had success with these programs. Conde Nast, for one, is cross-merchandising Gourmet at the deli departments at 20 supermarket chains across the country. The magazine is displayed in free-standing clear plastic racks. Four-fifths of the time, says Michael Garavalia, the promotions are very successful. But Garavalia and others acknowledge that cross-merchandising can bring more headaches than it is worth.

"It takes two to tango," Garavalia says in explaining that such programs require willingness on the part of the retailer to merchandise and maintain the fixture--a willingness that often evaporates in the daily course of business. Wholesalers say that it is inefficient to have their personnel trying to service these one- or two-title displays scattered throughout the store.

Adds CBS's Alexander: "A lot of people talk about cross-merchandising--put Road & Track in the antifreeze department, for example. But people are not going to the antifreeze department to find Road & Track. If you can call the consumer's attention to your product where it normally lives, you're doing yourself a favor."

The big time: TV

While television advertising is out of reach of most magazines because of the expense, some of the high-volume front-end magazines, TV Guide and the tabloids among them, do use it to build consumer awareness for the publications and to promote specific on-sale issues.

One relative newcomer to the check-out has been using TV promotion extensively and with good results. Woman's World, a service magazine that has had national distribution only since May 1984, saw its circulation jump nearly 17 percent in the first half of 1985. Vice president Richard Parker explains that the magazine has developed its newsstand sales using a combination of newspaper sampling and heavy television advertising.

In 1985, according to Parker, the magazine spent in excess of $4 million on television advertising on a spot market basis. Depending on the market, sales are lifted upwards of 30 percent when the advertising runs, he says. One wholesaler whose territory has received the TV advertising says that he saw sales there jump by 50 percent while the campaign ran, with half the lift retained afterward.

What more, should be done?

Invariably, publishers, distributors and wholesalers say that members of the magazine industry, individually and collectively, can do much more to help newsstand sales. Who can blame retailers for ignoring magazines, they ask, when the Philip Morrises and Frito Lays of the world come in and dazzle them with slick presentations, silence them with reams of research, entice them with special deals and consumer promotions? The question is not meant to be flip; it is readily acknowledged that these packaged-goods marketers have been more sophisticated in marketing their products to the retailers and to the retailers' customers. The publishing industry should take a few lessons from the competition, say its members.

Robert Matthiessen, executive vice president of client relations for Warner Publisher Services, points to a pile of glossy research reports on his desk as one example of what retailers are seeing from other marketers: "The Consumer Revolution" from General Foods; "Profitable Merchandising in a Changing Marketplace" from Philip Morris; "Convenience Store Consumer Purchasing Patterns," a study conducted for the National Association of Convenience Stores (NACS) and sponsored by Coca-Cola, General Foods and M&M/Mars. Certainly there are examples of this type of retailing research being done by those in the publishing industry, but publishing is not doing it as extensively, he and others acknowledge.

Says another exasperated distributor: "Look at us. NACS has its convention and no one from the industry bothers to go."

Research for better display

Research on ways to better display magazines, including the actual fixtures and the arrangement of publications on the fixtures, is desperately needed, according to many sources.

"From a merchandising standpoint we're very weak as an industry. That's the largest concern for every segment," comments Murray of Esquire. "The key is for the industry to come up with a universal merchandising technique which will succinctly state what works, what doesn't, for specific categories of magazines." Other consumer products do this, Murray points out. Look at the cereal aisle, he suggests as an example: The staples such as corn flakes are always in the middle of the shelf, with the faddier cereals on the fringe. Research has determined that that is the most effective display plan for this product.

Seconds wholesaler Ike Bay: "There has to be a lot of work in basic display for the mainline magazine rack. What, from the consumer's viewpoint, is the best display? Where should the crosswords go? What is the right concentration of products per linear shelf foot? At what point does the way we merchandise affect the unit sale? We don't have that information."

Money, of course, is the stumbling block to accomplishing such extensive research. It would take a pooling of resources, as has occurred for the DPP project, to come about, and it is not often that industry members can or will contribute such large sums of money.

In terms of special consumer promotions, wholesalers say they would like to see publishers use many of the techniques so commonly used by the consumer packaged-goods companies--such as couponing, sampling, co-op advertising, tie-ins with other products. Consumers these days are conditioned to expect discounting and sales--they have become reluctant to pay full price, notes Stanley Seidler, head of Iowa Periodicals in Des Moines. "Unless we counter that with some aggressive merchandising and some 'offers,' whether it be in cents-off coupons, special displays, tie-ins, there will be no dynamics in our market."

As an example, Seidler suggests that off-sale copies, a tremendous wasted resource, could perhaps be sold with coupons on some limited time basis; or a food magazine such as Bon Appetit could be packaged with Pillsbury cake mixes in a tie-in promotion. "If we just continue to make the traditional offer--nice displays, putting our wares out--people are not going to be motivated to purchase," he comments.

Littlepage of Denver News says he likes the idea of contests to get consumers--and retailers--more involved with magazines. A good example is an upcoming promotion planned by Chocolatier, the quarterly magazine for gourmet chocaholics. The magazine is sponsoring a dessert recipe contest tagged "The Great American Chocolate Challenge." The contest will be announced in a four-page spread in the May issue, on sale in March, and special displays in certain supermarkets and bookstore chains will herald it. Radio and newspaper advertising to promote the "Chocolate Challenge" is planned for three test markets, according to Charles Squires, vice president, circulation director for the Haymarket Group Ltd., which publishes Chocolatier.

Readers naturally respond to such contests because of the lure of expensive prizes, and retailers appreciate the event because the good will created rubs off on their store. Says Littlepage: "Retailers get excited when you start giving their customers something--it brings customers in and makes them happy, without the store ever having to do anything." Publishers, he contends, are not aware of how meaningful these intangible benefits are to retailers.

Other sources suggest that more "road shows" by the editors and publishers--the personalities behind the product--would make a strong impression on retailers and readers. Essence magazine, for instance, occassionally blitzes a market with personal appearances by its editor, Susan Taylor. Although the tactic significantly increases newsstand sales in the target areas, it is very time-consuming for the editor and so can be done only rarely, notes the circulation director.

A marketer's dream

When asked what more should be done to get single-copy sales perking again, Jack Fitzmaurice, who comes from a packaged-goods background, describes his ultimate dream: "One of my fondest hopes is that somewhere, somehow, we can talk enough big people into supporting a test market, where we go in over the course of six months or a year and, with good control over the market, inject the kinds of consumer packaged-goods things that you would do to stimulate product sales."

The test, Fitzmaurice continues, would revolve around a theme generically promoting publications "through television, radio, talk shows, giveaways of magazines, newspaper advertising, co-op coupon dissemination through Sunday newspapers, a variety of subsidized promotions at retail--coupons, two-for-one promotions, shelf talkers, any number of things," he describes. "...I want to see what the impact would be on single-copy sales."

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