MAGAZINES AND BOOKS AT RETAIL CONFERENCE 2017
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1 MAGAZINES AND BOOKS AT RETAIL CONFERENCE 2017 MAINLINE BEST PRACTICES STUDY MAGAZINE IN MAINLINE GROCERY BEST PRACTICES STUDY DEVELOPED IN PARTNERSHIP WITH SPONSORED BY TIME INC. RETAIL AND MAGAZINE & BOOKS AT RETAIL ASSOCIATION 1
2 Key Findings There is a huge opportunity available for the Mainline Magazine aisle. High Performing Stores enjoy sale rates 53% above Average Performing Stores Mainline Magazine shoppers are very attractive grocery customers based on age, income and educations levels Best in Class adjacencies include Greeting Cards, Pet Care, HBC, Paper Products, School/Office Supplies, Seasonal Products and End of Aisle 41% of Mainline shoppers visit the Mainline section of the store on more than 75% of their store visits A Best in Class Mainline section is 25 linear feet or more with a sales per million $ ACV index of 131 followed by 20 to 24 linear feet with an index of 118 2
3 Research Participants 500 stores used in the research Audits taken regarding merchandising approaches to the Mainline Magazine aisle by Magazine Wholesaler Merchandising Staff, MagNet and TNG Time Inc. Retail provided Store Level ACV data to Dechert-Hampe Consulting for third party analysis/objectivity 3
4 Online Consumer Survey 2200 people interviewed about magazine purchasing habits 300 Mainline Grocery shoppers interviewed Consumer participant qualifications: Purchased a magazine in the last 3 months Purchased a magazine in a supermarket Purchased a magazine in the Book/Magazine section of the store (not at the front-end checkstand) 4
5 5 CONSUMER INSIGHTS
6 Mainline Respondents Were Evenly split between male and female 57% of respondents were between the ages of 25 and 54 62% had a Bachelors Degree, a Master Degree or higher 71% were married and 58% had a household size of 3 or more people 48% had a family income of between $75,000 and $150,000 58% were employed full time Supermarket Mainline shoppers are very valuable customers 6
7 Consumer Insights Key Findings Over 50% of people not purchasing at the Supermarket Mainline had subscriptions while 35% said they purchased at a Mass Merchandiser 40% of Mainline Shoppers visit the Mainline on at least 75% of their trips Over 1/3 of those shopping the Mainline purchase a Magazine at least 3 of every 4 trips The average Mainline purchaser shops 3.7 channels for their Magazine needs Most popular types of Magazines purchased are: Entertainment, Food/Wine, Homes & Gardens, Sports and Health & Fitness Respondents defined 64% of their Mainline purchases as impulse Cover visibility is the most important attribute of the Magazine section followed by selection/assortment 7
8 Mainline Shoppers Visit the Magazine Section Frequently and 37% of Them Purchase a Magazine on at Least 3 of 4 Visits How frequently do you visit the magazine section at the supermarket? When you do shop at the magazine section, how often do you purchase magazines? % of Mainline Respondents On Every Visit 15% On Every Visit 13% More Than 75% of Visits 26% More Than 75% of Visits 24% Between 50% & 74% of Visits 31% Between 50% & 74% of Visits 32% Between 25% & 49% of Visits 15% Between 25% & 49% of Visits 16% Less Than 25% of Visits 12% Less Than 25% of Visits 14% There is an opportunity to increase conversion of Grocery shoppers into Magazine Buyers 8 TIR/MBR Online Survey March 2017
9 Supermarket Mainline Purchasers Also Purchase Magazines at Other Channels Other than supermarkets, where have you purchased magazines in the last three months? % of Mainline Respondents (Multiple Responses Allowed) Mass Merchandisers Convenience Stores Drug Stores Traditional Bookstores Online Discount/Warehouse Clubs 28% 39% 37% 35% 33% 57% The average Mainline respondent shopped 3.7 channels for their magazine needs Supermarket shoppers are also purchasing Magazines at other channels Supermarkets need to convert their shoppers into Magazine buyers 9 TIR/MBR Online Survey March 2017
10 Most Popular Types of Magazines Purchased Were Entertainment, Food/Wine, Homes & Gardens, Sports and Health & Fitness What types of magazines have you purchased in supermarkets over the last three months? % of Mainline Respondents (Multiple Responses Allowed) Entertainment Food/Wine Home & Garden Sports Health/Fitness Celebrity/Lifestyle Fashion Womens Cars/Trucks/Boats/Rec 41% 40% 40% 39% 38% 34% 31% 31% 29% Computers/Business Games/Puzzles General News/Politics History/Science Mens General Interest Arts/Literature Tabloids Crafts/DIY/Adult Brides 9% 27% 27% 26% 24% 22% 21% 17% 16% The average mainline shopper purchases five different types of magazines 10 TIR/MBR Online Survey March 2017
11 Magazine Cover Topic and Image Were the Most Important Reasons for Choosing a Magazine on Impulse #1 1 #2 2 #3 3 #4 4 #5 5 Magazine Cover Topic/Headline 39% 33% 17% 9% 2% Magazine Cover Image 29% 26% 27% 9% 9% Performance Rank: 1 = Most Important 5 = Least Important % of Mainline Respondents Purchasing on Impulse Impulse Decision Rankings Featured Article 25% 27% 31% 14% 4% Special Promo 4% 5% 11% 29% 51% Special Price 3% 9% 15% 39% 34% Cover topics and image are key to impulse purchases Therefore, ensuring leading magazines are full faced is critical 11 TIR/MBR Online Survey March 2017
12 Most Planned Purchases Are for a Magazine the Shopper Purchases Frequently As your last magazine purchase was a planned purchase, was the magazine: % of Mainline Magazine Respondents Whose Last Magazine Purchase Was Planned (Multiple Answers Allowed) The Latest Issue of a Magazine I Purchase Frequently 63% Magazine Purchased for a Special Topic 54% Special Issue Magazine with Special Features (Reflective Cover, Popouts) 47% 46% Local Interest 26% Other 2% Over half plan a Magazine purchase for a Special Topic like a tribute to a celebrity 12 TIR/MBR Online Survey March 2017
13 There Were a Number of Reasons Respondents Found It Difficult to Locate Their Desired Magazine Why was it difficult in locating the desired magazine? % of Respondents Who Answered Somewhat or Very Difficult (Multiple Answers Allowed) Section Located After Checkout Magazine Section in Poor Location in Store Cover/Product Hard to See Section Too Small Messy Section Poor Organization Poor Lighting Not Enough Room to Shop 17% 22% 28% 33% 33% 33% 39% 39% Location in the Store was a key reason for about 40% of the respondents 13 TIR/MBR Online Survey March 2017
14 Cover Visibility Was Deemed the Most Important Attribute of the Magazine Section How important are these attributes? VERY IMPORTANT % of Mainline Respondents Cover/Product Visibility Selection/Assortment Section Easy to Find Logically Organized Well Lit Section Cleanliness of Section 49% 55% 54% 54% 57% 61% Location in Store 48% Price/Value of Magazine 45% Enough room in aisle 45% Seating Availability 26% Selection/Assortment, Easy to Find Section, Logically Organized and Well Lit Section were also very important attributes 14 TIR/MBR Online Survey March 2017
15 15 MAINLINE SUMMARY
16 Many Stores That Are Top Selling Mainline Stores Are Also Top Selling Checkout Stores Top Selling Mainline Sales Stores That Are Also Top Selling Checkout Stores ($ 00) Top 10 Mainline Stores Top 25 Mainline Stores Top 50 Mainline Stores Based on Dollar Sales Based on Dollar Sales/MM $ ACV 16 # In Walking feet * Limited Sample
17 The Opportunity for Improvement in Mainline Sales is Significant Magazine Mainline Sales Per Million $ ACV $2,025 $1,264 $378 $788 $35 $59 $83 $109 Dollar sales per Million $/Shelf Ft Store PerformanceLow Medium High Optimal High Performing Stores enjoy a 53% dollar increase in store performance over the Average Store The Optimal Performing Store generates $2025 for every million dollars of All Commodity Volume 17 # In Walking feet
18 Characteristics of Top Performing Stores Mainline Section CHARACTERISTICS ADJACENCIES MAINLINE LOCATION MAGAZINE AISLE LENGTH Toward Middle or Center of Store 25+ Linear Feet ACROSS THE AISLE Pet Food, Seasonal, Greeting Cards, Stationery, School/Office Supplies NUMBER OF TIERS NUMBER OF SHELVES 4 or More 12 or More LEFT OR RIGHT HBA, Pharmacy, Seasonal School/Office Supplies, Greeting Cards, End of Aisle 18 # In Walking feet * Limited Sample
19 The Length of the Mainline Section Can Have a Significant Influence on Magazine Sales Index of Mainline Magazine Dollar Sales Per Million $ Length of Mainline Section (Feet) <12 12 to to to 24 >25 Increased Mainline space does deliver increased Magazine sales 19
20 Retailers Will Want At Least 12 Mainline Shelves in the Magazine Aisle to Help Shoppers Find the Magazine They Seek Index of Mainline Magazine Dollar Sales Per Million $ ACV Number of Mainline Shelves 9 or Less or More 20
21 Four Tiers Within the Mainline Aisle Is the Best Approach to Merchandising the Mainline Index of Mainline Magazine Dollar Sales Per Million $ ACV Number of Tiers Limited Sample
22 Across All Adjacencies HBA and Pet Food Generate Higher Index Levels Index of Mainline Magazine Dollar Sales Per Million $ ACV Categories Across, Left, Right of Mainline Section HBC Pet Food Dairy Other End of Aisle Greeting Cards Candles Baby 22 * Must be represented by >=4$ of audited stores *Limited Sample
23 Mainline Magazine Supports Many Titles and Provides for the Varying Consumer Requirements % of Total Mainline Magazine 2016 Dollar Sales % 78.9% 85.5% 90.0% 93.2% 95.4% 96.9% 97.9% 98.6% 99.1% 99.5% % # of Titles The top 100 titles generate 37% of Mainline sales The top 500 titles generate 86% of Mainline sales 23 Limited Sample
24 Additional Magazine Merchandising Opportunities Will Drive Incremental Sales Index of Mainline Magazine Dollar Sales Per Million $ ACV Yes No Yes No Yes No Yes No Yes No Yes No Mainline Feature Title Rack Magazine Category Signage Cross- Merchandising Rack Spinner Rack Additional Rack Lane Blocker 24
25 Final Thoughts When remodeling older stores or building new stores, make sure that the Mainline Magazine section is towards the middle of the store with end of aisle exposure Provide at least 24 linear walking feet or greater to the Mainline section. If that is not available, 20 to 24 feet is beneficial Successful category adjacencies include: Greeting Cards, Stationery, School/Office Supplies, Paper Products, Pet Foods and HBC Review assortment to make sure that the various Magazine segments are allocated correctly and make sure key Magazines are full faced Provide signage in-aisle to help consumers easily find the type of Magazine they are looking for Make sure that the Mainline section is shoppable meaning a proper length, well lit, with easy to read covers. And don t forget that ancillary displays do drive incremental sales 25
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