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Like beverages and confectionery, magazines are a profit center for front end checkout. In-line, the category also delivers for supermarkets, with even more potential when grocers do more with it.
While the category has faced a year of challenges ? the death of a major wholesaler, continued consumer migration to online and digital media, and a flat economy that keeps impulse spending in check ? books and magazines continue to turn profits for supermarkets. While only 8 percent of supermarket shoppers purchase magazines, those consumers are crucial.
?They may not be a huge group, but supermarket shoppers who purchase magazines are among the most loyal ? they are in the store most frequently and shop the entire store,? says Jackie Gray, director at Barrington, Ill.-based consultancy Willard Bishop.
They also spend more. ?Those consumers represent 32 percent of an average store?s sales. Their average basket ring is $45, versus $34 for other shoppers, and they have an average of six more units in their basket than other shoppers,? adds Gray.
Research from Time Inc. Retail shows that basket rings containing a magazine are 135 percent greater than those without a magazine. A recent study from the Parsippany, N.J.-based company revealed that magazines have an average unit price of $4.38 and generate three times the revenue of a gum or mint item.
?Magazines generate more than two times the per-unit profit compared to the other front end categories,? notes Bill Romollino, VP of shopper insights at Time Inc. Retail. ?Magazines are also highly impulsive, which helps drive front end incremental sales. Almost half of shoppers say they have purchased a magazine from the front end checkstand.?
Experts say that given more attention, the category can perform even better. ?The strength of any DSD category is that when it runs itself, it?s OK, but when corporate really engages and puts resources into the category, it really makes a difference,? points out Jerry Lynch, president of the International Periodical Distributors Association (IPDA), the trade organization for distributors. ?The chains that continue to have the greatest success are those that are closely managing their category.?
Chains that give the category ample space ? even a place to sit and browse publications at some stores operated by Rochester, N.Y.-based Wegmans Food Markets ? enjoy higher-than-average category sales. In addition to its large publication section, Ahold USA?s Maryland-based Giant-Landover uses floorstands to vary the department?s selection.
Merchandising at checkout is critical. ?Improving checkout shopper conversion by only 1 percent nationwide across all front end categories could add over $560 million in revenue annually,? says Romollino. ?We know that 65 percent of shoppers like to read magazines while waiting in the checkout line. We are working on displays that convert browsers to buyers.?
Disrupting the checkout process is particularly challenging in self-checkout lines. Time?s research shows that less is more when it comes to front end merchandising. ?Temporary displays in front of the checkstand end caps do not drive incremental sales,? notes Romollino. ?Those retailers that have less clutter at checkout have higher conversion rates. More isn?t necessarily better. At a certain point, it all becomes noise to the customer, and then it?s all irrelevant.?
Whole Foods Market makes a point of keeping its checkouts uncluttered, but still manages to maximize the space it gives to the category by using 4-foot spinner racks at the end of each lane to display facings neatly. Titles, which focus on health and gourmet cooking, reflect the Austin, Texas-based chain?s upscale, health-conscious positioning.
Mainline sales can also be boosted with the right merchandise strategy and the right mix of product.
Magazines can be a key part of a chain?s differentiation strategy. ?Regional titles can help a chain align itself with its consumers, and food and wine titles can help establish a chain with its foodie consumers,? asserts IPDA?s Lynch.
Several segments within the category have been driving sales; for instance, children?s books have been a bright spot in the category. ?Kids? books are standing out as an extremely strong segment in both mass and supermarket channels,? observes Lynch.
Additionally, ?bookazines,? single-topic publications that have high production values and retail for a higher price point than traditional magazines, have been increasingly successful over the past two years. ?The segment has really picked up, and we?re not seeing it cannibalize sales of other products,? says Lisa Scott, executive director of the New York-based Periodical & Book Association of America (PBAA). These products, adds Romollino, have a high perceived value and ?seem to connect with consumers.?
Moving in-line magazines beyond their traditional merchandising set can also give the category significant lift. ?Increasing the visibility of Gourmet or Saveur near the meat or fish department is not only good for magazine sales, but good for the meat and fish department,? notes Willard Bishop?s Gray. ?It?s smart cross-merchandising to feature the July issue of Martha Stewart Living near a July 4th barbecue display, or to put coloring books or puzzle books next to children?s HBC, since a mom with a sick child is likely to pick up Mucinex, Tylenol and an activity book for a child who is home from school with a cold.?
Displays that work food titles into the wine aisle or health titles into the pharmacy department are like ?signage without the signs,? adds Lynch. ?They help a chain solidify its image with the shopper.?
Time Inc. is working with consumer packaged goods suppliers to create meaningful cross-merchandising programs. ?Building solution centers has been successful,? says Romollino. ?Programs that combine magazine titles with product, and are accompanied by incentives, are the most successful.?
Rodale Inc., in partnership with Time Inc. Retail, is testing new merchandising strategies. The Emmaus, Pa.-based publisher of health-and-wellness titles recently piloted its Digest Display mainline digest merchandising unit that holds four digest-sized titles in less space than two B-sized magazines. According to Rodale, initial tests across all three channels have shown average sales increases of around 25 percent.
High-dwell, high-traffic areas like the deli and pharmacy departments are good opportunities for cross-merchandising. As such, Rodale has developed a deli spinner that can be used beneath the take-a-number ticket dispenser. In one test location, Men?s Health experienced a 55 percent sales lift.
Similarly, Rodale?s pharmacy power wing display, designed to hold three digests and eight B-size health-and-fitness titles, has been a big success in generating impulse sales in the pharmacy department.
Dick Terlaak Poot, Rodale?s senior national marketing director, notes in PBAA?s Retail Marketplace Conference report that ?a major regional grocery chain showed impressive average sales increases in stores with the power wing, compared to stores without the unit.? According to Poot, sales of Prevention increased 63 percent, Men?s Health sales were up 73 percent and Women?s Health showed a 111 percent spike in sales at locations featuring the rack.
?Supermarket shoppers who purchase magazines are among the most loyal ? they are in the store most frequently and shop the entire store.?
?Jackie Gray, Willard Bishop