Magazines fit into their strategy.
Like our earlier speaker,Jeff Bezos,they have redesigned their business model from the bottom up for magazines to strengthen their competitive position.
Barnes&Noble,for example,has designed its magazine section as major in-store destination.It bypasses traditional wholesalers with direct delivery and its own in-store merchandisers;aggressively leverages scanned point-of-sale data to customize each store's layout,optimize assortment store-by-store,even using this data to drive an automated replenishment system.The result:magazine sales at B&N have outpaced overall growth;sell-through levels are way in excess of industry averages.
In another significant phenomenon,consolidation of the retail industry has concentrated buying power.A mixed blessing!But the net result is that the top 9 retail accounts today represent between 50 and 60 percent of retail volume;23 retail calls will reach over 80 percent.
Emerging Classes of Trade
And the retail landscape continues to evolve,presenting new challenges for us.The Internet has emerged as a serious retailing competitor in just about every product category,including magazines.
Consumers are embracing new types of bricks-and-mortar retailers too.
There are 25,000 Dollar Stores,like Dollar General and Family Dollar,growing at 12%a year.
Price Clubs like Costco and Sam's generating some$80 billion in sales.
Limited assortment chains like Save-A-Lot and Aldi,growing at 3 times the rate of conventional supermarkets.
In many cases,the single copy model does not appear to be a comfortable fit.Where are the magazines in Costco?Or in Trader Joe's?We need to create a fit.Many of these new,rapidly growing channels do not sell magazines simply because our single copy,one-size-fits-all distribution model doesn't work for them.
We need greater flexibility in how we serve these retailers.