By Jerry Lynch,
President, Magazines and Books At Retail/MBR
(Editor’s note: Some of the content in this article appeared in an abbreviated version first published in MediaPost.)
The only thing for certain in retail today is that the rate of change will accelerate. For magazines, that pace will likely be exponential. But that doesn’t mean that our category has to be a passive bystander.
For starters, we should take a proactive role in embracing and adapting to the changes coming, and in helping retailers effectively employ the category’s very real strengths — including deep consumer connections and insights/data — within their post-pandemic plans.
But I’d go further, to argue that with planning and coordination, we have an opportunity to use ecommerce to turn a stressed, currently narrowly focused retail channel into an expanded platform, with enhanced sales and profits for all.
Preparing For New, Post-COVID In-Store Dynamics
Let’s look at traditional retail first.
Even as adoption of ecommerce and curbside pickup shot up —and despite the inconveniences of safety precautions needed in stores — sales in bricks-and-mortar food stores also soared by double- and triple-digit percentages. And as foot traffic increased, so did magazine sales. Consumers turned to trusted content brands for entertainment and all kinds of DYI advice to make their time at home more enjoyable and productive.
While the height of the grocery surge has abated, safety concerns and increased eating at home due to near-unprecedented levels of unemployment and general economic uncertainty are expected to keep grocery shopping levels elevated, both in store and online, even as restaurants open.
Traffic in the “non-essential” stores that survive will also rebuild over time, once people feel safe. Surveys and retail traffic in overseas countries that are farther along the COVID-19 recovery curve indicate that consumers are cautiously returning to stores as restrictions ease.
Still, consumers’ expectations and buying patterns will be altered to some extent — which means that retailers’ priorities and approaches are also changing, as we're continuing to document day after day in our MBR Publishing & Retail News enewsletter.
We can’t yet be sure of the exact nature or extent of those changes, but we can prepare, both within our category and in collaboration with retailers, to be ready when they come.
During a recent webinar hosted by MBR, Kantar Retail SVP Dave Marcotte urged leaders in the publications category to actively research the most likely new scenarios at retail, create a plan for each, and watch for key signals that tell us which plan or plans to activate. I agree, and would add that all such scenarios should incorporate new shopping patterns and methods of purchase.
Why? For starters, COVID-19 will result in long- as well as short-term changes in store environments. For instance, if wider aisles and less clutter become common, SKU rationalization and the battle for display space will only intensify.
Most impactfully, the reduction of the traditional checkouts that have been crucial to magazine impulse sales will likely accelerate now, as the hygienic advantages of contactless payment are added to the existing drivers of reducing customer wait times and labor costs.
Pandemic factors aside, other significant tech-driven changes —from digital in-store marketing to inventory and supply-chain management — are changing the retail environment for all categories.
One example: Technology is now being used to direct shoppers to product locations in stores. Magazines must be capable of participating in that technology, or risk literally not being there for consumers.
The Ecommerce/Omnichannel Opportunity
Then there’s omnichannel, where genuinely transformative opportunities could be waiting.
Thanks to behavior changes forced on consumers by social distancing, ecommerce will amp up more quickly going forward, both for grocery and many other types of products.
Omnichannel requires that products be available wherever and however consumers decide to “go” to the store.
So yes, we should be redoubling efforts to update and upgrade magazines’ marketing and optimize their presence at retail — not just in supermarkets and the other familiar magazine outlets, but in formats that are increasing their retail share, like convenience stores. Why? Simply put, people can’t buy what they don’t see.
But in addition, we should be making physical magazines available for online purchase through partnerships with key retailers.
In other words, print magazines should be marketed, sold and delivered to homes or picked up at stores — via retailers’ now-common “click-and-collect” programs — through the ecommerce channel, along with groceries and other products.
Why should magazine media seriously consider taking steps to establish a retail-based digital marketing platform for print products — particularly at a time when their advertising and events revenues have been severely impacted by the pandemic?
Well, publishers know that when faced with disruption of existing models, calculated innovation is actually the only well-reasoned response. They’re already responding to the current circumstances with innovations on many fronts, including social media, podcasts and… ecommerce efforts.
Indeed, publishers ranging from special interest publisher AIM to Meredith, Hearst and Condé Nast are reporting that ecommerce tie-ins, including affiliate fees realized through links in “commerce content,” are becoming a significant revenue stream.
So is it unrealistic to think that, given the right online marketing, consumers who are buying products based on seeing them in trusted magazine content might also buy the magazines themselves through the same ecommerce channels — if given that opportunity?
More questions that seem worth considering:
For all of the challenges facing print, are publishers willing to forego the print advertising and circulation revenue streams? While they’ve taken some brands digital-only, and reduced print frequencies for others, print advertising and circulation revenues are still critical for most publishers.
If magazines are being printed, and are already carried in stores, why not try to build on that existing relationship to leverage ecommerce, retailers’ most rapidly growing channel?
Supermarkets’ online sales have soared by double and triple digits during the pandemic, and accelerated consumer adoption of online grocery services is expected to drive continued expansion going forward.
Further, the ecommerce channel can bypass the high cost of postal delivery, opening the possibility of improved per-copy revenues and profit margins.
Another potential publisher benefit: Advertisers have long viewed single-copy newsstand sales as top-quality circulation, because direct purchases made at substantial prices are strong indicators of magazines’ perceived value and “wantedness.” Given that dynamic, wouldn’t building significant numbers of direct online sales of magazines serve to support advertising sales, as well as expand consumer-driven revenue?
With traditional in-store checkouts being reduced for cost and hygiene reasons, retailers are now pushing to develop effective strategies for driving impulse sales online — a particularly tricky proposition as consumers pull back on spending in tough times.
Given that magazines have always been key impulse items at physical checkouts, yielding high per-copy profit margins for retailers, why not work with retailers to employ magazines’ impulse power online, as well? After all, when budgets are pinched, magazines have been shown to be attractive as a guilt-free, even good-for-you, indulgence that comes at a modest price.
Developing the ecommerce channel would of course require some effort and investment. But there are always challenges associated with innovation — which we find ways to overcome if we assess the opportunity to be significant enough.
Making magazines compatible with retailers’ ecommerce sites would require technology adaptations and cooperation from retailers, as well as cooperation among the rest of the magazine category’s supply chain. Among other things, magazines would need a system for generating online listings and promotions that reflect true magazine inventories within stores, just as other products have.
When you think about it, in this day and age, even small companies selling specialty items are participating in retailers’ online marketplaces.
So the bottom-line question is, why would an industry as sophisticated as magazine media — an industry that has pushed to harness all kinds of other technology, including digital subscriptions, social media and streaming video — not leverage the juggernaut ecommerce channel to sell its own core products?
MBR is working to capture the ecommerce opportunity, and inviting all to join us in mapping the process and testing solutions.
We also welcome input, ideas and counter-arguments (email me confidentially at email@example.com).