Time's New Editor Looks to Continue Momentum
Excerpts from a MIN Q&A with Edward Felsenthal, the Time digital editor promoted to its EIC now that Nancy Gibbs has stepped down. On what he and Gibbs accomplished: "The first thing we did was create a 24/7 news operation that now spans from Hong Kong to New York to London every day. We brought in a wave of new talent, many of whom were digital natives, but they came to New York because they wanted to work with experienced Time journalists. The combination of those two assets is what’s driven our growth. We built a video operation from two people. We reach more than 100 million across platforms, but the next stage for us is ramping up how we use these powerful platforms going forward." On the importance of the print edition: "When Nancy took the helm we were still a print brand with a relatively small digital business. It’s hard to argue that the print magazine isn’t more relevant than it was four years ago, but we need digital to use its authority, its access to people of influence, and the trust readers put in us to tell the stories of our time." On his biggest immediate goal: "Continuing to grow the video we do every day across our sites and social platforms, but also working with new partners to develop feature-length video and short-form documentary is a huge growth area. So I would like to see us make some progress there."
Time Inc. Rebrands Its PEN Network as 'PeopleTV'
Variety: "A year after launching the People/Entertainment Weekly Network--PEN for short--Time Inc. has scrapped the name for a simpler moniker: PeopleTV. The free, ad-supported online-video network carries short- and long-form programming covering celebrities, pop culture, lifestyle and human-interest stories. Since its September 2016 debut, the network has delivered more than 100M views of its content and its apps have been downloaded more than 2M times, according to Time Inc. While the rebranding drops EW from the name, Time Inc. said that Entertainment Weekly Studios “will continue to contribute significantly to PeopleTV programming.” The company said it made the switch to leverage People magazine’s “recognizable and iconic” brand... PeopleTV is available on peopletv.com, iOS and Android devices, and Apple TV, Roku players, Amazon Fire TV, PlutoTV, Xumo, Google’s Chromecast and Comcast Xfinity." Article lists the OTT network's 2017-18 programming lineup, and notes that live events will also continue to be part of the programming mix. (The network ran three days of coverage around this past weekend's Emmy awards.)
Sandow Taps Former Allure Publisher
WWD: "Sandow has tapped former Allure publisher Agnes Chapski to be president of NewBeauty and Beauty Engine, the company’s newly formed beauty solutions business. Chapski was the publisher and chief revenue officer at Allure, a position she held for nine years. Prior to that, she was the associate publisher of Vanity Fair and Lucky. NewBeauty, which was launched by entrepreneur Adam Sandow’s company over a decade ago, is a multiplatform magazine and website devoted to the beauty industry. Beauty Engine is the company’s latest innovation, designed to build out the NewBeauty network through supplying business services to brands in the beauty space. Chapski will oversee all aspects of NewBeauty’s development, and will be tasked with ramping up Beauty Engine. 'NewBeauty is uniquely positioned to service this underserved market of affluent women who take their beauty seriously and the marketers that want to reach them,' says Chapski. 'I’m here because of Sandow’s vision to disrupt the traditional model of publishing and its commitment to build an innovative solutions business that will help our partners and deliver results'"...
Post: Rolling Stone Sale Could Prove Challenging
NY Post's Keith Kelly cites unnamed sources asserting that realizing a solid price for the sale of its 51% remaining stake in Rolling Stone may prove challenging for Wenner Media. "Rolling Stone’s ad pages have shrunk, as has its once-oversize book," says the piece. "'I think he will have a hard time commanding a good price,' said one source, even with a magazine said to have revenues of over $40M. Time Inc. and Condé Nast are in cutback mode and not interested, with the latter apparently content to operate its Pitchfork music website, insiders say. Hearst, which had held talks to buy Rolling Stone a decade earlier, is also out of the running, according to sources. American Media, which cut a $100M deal with Wenner earlier this year to buy Us Weekly, and more recently added Men’s Journal at an undisclosed price, looks unlikely to go to Wenner’s well a third time to buy Rolling Stone, several sources say... tech titans also have been rumored as possible buyers. 'It would be a very sticky app for someone such as Verizon, Apple or Amazon,' one music and publishing veteran observed. 'And for them, the money to buy it would be pocket change.' Still, Silicon Valley has shown scant interest in venturing into print. Vox, Buzzfeed and Vice have all been mentioned as possible suitors. But as one music veteran pointed out, 'Rolling Stone has a brand identity for baby boomers and Gen X--but it has almost no resonance with millennials.' Further complicating any deal is the fact that Singapore-based BandLab Technologies paid about $40M for a 49% stake in September 2016--but apparently passed on buying the remaining 51% still owned by Wenner and family members." Article also cites sources saying that there was a near-deal with Hearst in 2007 to buy Us Weekly for $700M to $750M, but Wenner supposedly resisted Hearst's desire to "add a buyout option on Rolling Stone down the road." It also notes that the $4.65M combined settlement money for two of the lawsuits stemming from RS's discredited University of Virginia rape article was " safely within [Wenner Media's] liability insurance coverage."
Taste of Home Named Feeding America Partner
Trusted Media Brands announced that its Taste of Home brand has been named an official media partner for the hunger relief charity Feeding America. "Beginning with its December issue, Taste of Home will share stories to help shed light on hunger challenges faced by millions of Americans and leave readers with a tangible call to action. Real examples of this include cooking for families in crisis, planting extra rows of vegetables to share, and working to make sure kids get lunchtime meals during the summer when they lose access to free school lunches. Feeding America will be featured in Taste of Home's print and digital editorial coverage and within TMB's enthusiast magazines Country Woman and Farm & Ranch Living as well as its largest brand, Reader's Digest, among others. The new alliance is a result of Taste of Home LIVE, the brand's 40-market experiential cooking event series launched nationwide in spring 2017. At each show, chefs demonstrate home cooks' best recipes... As part of Taste of Home's ongoing commitment to local charities, Taste of Home LIVE hosted a food drive at each local event and donated 10% of its total merchandise sales to local Feeding America member food banks. The program donated more than a ton of food to local food banks as well as merchandise sales and onsite attendees' financial contributions, which contributed the equivalent of an additional 7,000 meals to help people in need."
Opinion: P&G Is Right--The Party's Over for Digital Advertising
MediaPost: "As Marc Pritchard, chief brand officer at P&G, made clear again last week, the digital media industry has a lot to answer for. If you think about the sums he's talking about it means an eye-watering $175Bof ad spend does not end up showing consumers a single thing. How can that be? Well, here's the thinking. Just 25% of media spend, he says, actually results in a consumer seeing anything. Take a $200B global industry and that means just $25bn worth of spend ends up being seen by consumers. This may be a good time to say it could actually be worse if you consider targeting. Research has shown that the majority of display does not reach the intended audience every time. Throw in a targeted audience and it's likely that Pritchard's gloomy picture could be even worse. At the very least, it is unlikely to be an exaggeration... Pritchard is completely correct, then, to call out the digital advertising scene for this waste of budget. He is already on record, along with Unilever, for saying that adland must become more transparent and that FMCGs can get by spending a lot less with fewer agencies. The two big names in FMCG advertising are each doing exactly that -- slashing rosters, making assets work harder and reducing budgets accordingly. When you think of the big drop in WPP's share price off the back of a prediction growth that would be, at most, just 1% this year, it isn't hard to imagine that it is simply the first big name to be on the receiving end of this new bullish attitude among the big advertisers. Pritchard is summing up 2017 so far as the year the bloom fell off the rose for digital advertising. It would just as easy to sum it up as the time budget holders took back control, and digital advertising had to realize that the easy times are gone."
OTHER NEWS OF NOTE:
FTC OKs Walgreens Buy of 1,900 Rite Aid Stores; Price: $4.38B
Bloomberg: " In its fourth attempt, Walgreens Boots Alliance Inc. clinched regulatory approval for a deal to buy Rite Aid Corp. stores after a last-minute reduction of the number of stores and price. The drugstore chain said Tuesday it secured clearance for a revised deal under which it will buy 1,932 Rite Aid stores for $4.38B. That's about 250 fewer stores than under a previous proposal, which totaled $5.18B. The deal, once completed, will be a hard-won victory for Walgreens CEO Stefano Pessina, who has pushed for a transaction that could clear regulatory approval since the fall of 2015. The modified agreement will still enable Walgreens to dramatically expand its footprint and become a more powerful competitor for CVS Health Corp. With the addition of the Rite Aid stores, Walgreens will have about 10,000 U.S. locations. Store purchases are expected to begin in October and be completed in Spring 2018, Walgreens said. Most of them are in the northeast and southern U.S..."
John Ross Succeeding Mark Batenic at IGA
PG: "John Ross, currently president of Inmar Promotion Network, will become president and CEO of IGA (Independent Grocers Alliance). He is succeeding Mark Batenic, who has served in the role since 2006; Batenic will continue in his role as chairman of the organization..."
SNAP Recipients Can Use Click-and-Collect at Some Walmarts
CNBC: "Wal-Mart said Tuesday that it's removing a hurdle that had long prevented food stamp recipients from using its online grocery shopping platform. The USDA, which oversees the Supplemental Nutrition Assistance Program, requires that customers using electronic benefits transfer, or EBT, pay for their purchases at the "actual time and place" of a sale. At limited locations, Wal-Mart allows shoppers using EBT to order items through its online grocery pickup platform, then pay in person when they pick up their purchases at stores..."
Kohl's to Accept Amazon Returns in Chicago, L.A.
Chicago Tribune: "Kohl's, which is opening some in-store Amazon shops, will start accepting returns for the online retailer at some of its stores in Los Angeles and Chicago starting next month. Kohl's Corp. said Tuesday it will pack and ship eligible Amazon return items for free at the 82 stores offering the service. There will be designated parking spots near the Kohl's store entrances for those doing Amazon returns. While the service will allow Kohl's customers to skip their local post office for Amazon returns, it also gets them into Kohl's stores, where they might then shop..."
Wegmans, Publix, Nugget Among Best Workplaces for Women
PG: "Fortune magazine’s 2017 ranking of the 100 Best Workplaces for Women, compiled in partnership with Great Place to Work, includes supermarket operators Wegmans Food Markets, Publix Super Markets and Nugget Markets. Wegmans came in at No. 7 on the annual ranking, while Publix was 39th on the list and Nugget was 95th..."
How Best Buy Is Surviving Amazon
NY Times columnist Kevin Roose points out that far from falling victim to Amazon, "Best Buy's rebound has been surprisingly durable. Revenue figures have beaten Wall Street’s expectations in six of the last seven quarters. The company’s stock price has risen more than 50% in the past year. Workers are happy..." Huburt Joly shared the secrets behind turning a rapidly failing chain around since becoming CEO in 2012: Matching Amazon's prices; focusing on human interaction in customer service--something Amazon couldn't compete with; and turning stores into "showcase and ship" centers. Regarding the last point, faster delivery of online orders was enabled: About 40% of Best Buy’s online orders are now either shipped or picked up from a store, rather than a centralized warehouse. Column elaborates on each point.
Amazon Said to Inadvertently Help Terrorists
The Independent reports that "Amazon is linking potential bomb-making components under the “frequently bought together” tab, guiding its users to all the ingredients required to make an incendiary device. The simple products are widely available in shops too, but Amazon’s algorithm recommends product combinations... If users click on Thermite, for example, which is a pyrotechnic composition of metal powder, the website links to two other items, which constitute the basic bomb-making materials. All three come to just over £20. When combined, the hazardous reaction is strong enough to cut through steel. Channel 4 News also found that ignition systems and remote detonators were also “readily available”, promoted under the “Customers also bought” tab."
Most Costco Members Don't Shop There, And That's OK With Costco
USA Today: "In many ways, Costco operates like a gym. It sells memberships knowing that many of its members won't show up. It's not upset if they do--and it takes care of its members who spend the most--but, in reality, it only needs customers to see the value of joining, not actually have them do any shopping... Members are lured in by the prospect of saving money, and even if they don't take advantage, they renew because they intend to in the future. The chain makes about 75% of its profits from membership fees, and a big piece of the remaining 25% comes from its best customers who spend much more than the average member... The chain uses low prices to entice people to pay either $60 for its basic "Gold Star" membership or $120 for an Executive membership, which gives members 2% cash back on eligible purchases until they earn $1,000 back. Either membership gets people in the door to the warehouse club, but Costco knows that only Executive members are likely to take significant advantage of its low prices. During the chain's earnings calls each quarter, CFO Richard Galanti notes the growth in Executive memberships. He then points out that about one-third of its customers pay the higher price to join, but that they account for two-thirds of sales. Costco closed Q3 with 18.3M Executive members who generated roughly $20B of its $28.2B total sales, excluding membership fees. Its 37.8M Gold Star members accounted for only about $8B... the figures aren't exact, but the data show that during Q3, Gold Star members spent about $211 each, while Executive members averaged $1,092..."
Opinion: 3 Ways the Amazon/Whole Foods Deal Will Change Retail Operations
Writing in MediaPost, Doug Baldasare, founder and CEO of ChargeItSpot, a provider of secure cell phone charging stations for retail stores, predicts three ways the acquisition will change the retail industry for the long term. 1. There will be more shopper benefits. "The Amazon-Whole Foods acquisition was made with the consumer in mind. Amazon will aim to keep customers satisfied with high-quality products and unique in-store experiences. Whole Foods has already started slashing prices on many of its most popular products, and the company promises that this is just the beginning. To keep up, competitors will have to find ways to meet these same lofty standards, possibly by offering deeper discounts and better loyalty programs. The acquisition has also put pressure on retailers to cut store footprints and adapt to consumer trends skewing online. Back in April, before the Amazon/Whole Foods deal, Wal-Mart began offering discounts on thousands of items if customers made purchases online and picked up in-store. Amazon has already upped the ante on this concept with Whole Foods. Now, many Whole Foods staples are already available for purchase on Amazon. If their online-centric model proves successful, competitors will likely follow suit." 2. Similar acquisitions will occur. "The retail industry has begun seeing an increase in large-scale acquisitions in areas outside the grocery space. Since June, a handful high-profile deals have taken place, with larger companies purchasing smaller e-commerce businesses to claim increased online market share. Walmart bought Bonobos for $310M, while QVC purchased HSN for $2.1B, making it the clear leader in home-shopping. Also, Michael Kors bought luxury retailer Jimmy Choo for $1.2B, giving Kors a leg up in the luxury world. And this is likely only the beginning." 3. The next step for Amazon: apparel? "When the Whole Foods acquisition is finalized, Amazon likely won’t wait long before planning out its next purchase and based on some of the company’s past and current moves, apparel seems to be the area of interest..."
Opinion: Time to Reinvent Category Management
In CPGMatters, Graeme McVie VP and GM business development at Precima, writes: "Brian Harris, the 'father of category management,' says that it’s past time to reinvent the effort and suggested there’s a need to move onto category management 2.0. Win Weber, another leading proponent, says the retail industry needs to change the way merchandising works because the concept of category management was formed before the internet was commercialized. It’s not just the internet that wasn’t around when category management came into vogue. Data analytics capabilities were a fraction of what they are today. Data capture and the ability to deliver actionable information to front line employees are now several generations advanced. So how do we reinvent category management with technology that is geometrically more powerful? The starting and stopping points must be the shopper. The tools are now available to better understand what motivations will drive buying behavior for individual shoppers, so customer-centric merchandising and personalized promotions should provide the pathways to both gain shoppers’ trust and yield proof points with C-level management to commit to a full revamp of category management. From that base of understanding the customer, category management 2.0 or shopper-centric retailing, as Mr. Weber calls it (Precima prefers 'total store optimization') needs to marry customer insights with product data to create a personalized shopping experience across all customer touchpoints. This is much easier said than done, but companies making the investment in people and technology will see increased market share and profit improvements. An example...can be seen in the bottled water segment, where consumers see little variation among different brands and 12-pack and 24-pack sizes take up large amounts of shelf space. Armed with shopper-level data about product preferences, retailers can be confident customers will switch their bottled water purchase to the available brands/sizes without being disappointed, [and use that additional 'real estate'] to expand their assortment to include more facings of healthy lifestyle beverages, which offer greater opportunities for high-margin sales." Comments on what's needed to move category management forward, from various industry experts, follow.
OTHER NEWS OF NOTE: