Top-to-top means CEO-to-CEO,and we are finding this can mean a very different,more strategic discussion than the magazine industry has had before.For me,these meetings have been an eye-opener into the retail community's perspective on magazines.
*For many,we are a low priority category,a blip on their radar and it's been tough getting through.
*It was startling to hear the COO of the nation's third largest magazine retailer tell Nina Link and me two weeks ago that our meeting was the first time a publisher had crossed his threshold.Nonetheless he was thrilled to see us.
*At another top-to-top,the president told us how critical the magazine industry's high level support was to his chain's repositioning and turnaround.We're working to help him further his goals.
These meetings are invaluable.We are listening carefully,communicating the strengths of magazines,learning a lot,and critically,we are being heard.
4.Emerging Channels
We are rethinking our traditional business model for important new channels where magazines are not sold today,in particular price clubs like Costco and Sam's,limited selection retailers such as Trader Joes,and dollar stores like Dollar General.
The team has profiled key players,focusing in particular on understanding how their business model compares to the standard retail formula;developed hypotheses for magazines'potential role;and generated practical options to break through.
For example,Costco,one of our primary targets,operates about 435 warehouse stores worldwide serving 41 million members(who renew at an enviable 86%rate).Revenues of$48 billion are growing at 13%annually.Costco is now the fourth largest food retailer in the U.S.,behind WalMart,Kroger and Safeway.This is a retailer we need to be in.Servicing Costco stores through the traditional wholesaler delivery and service model is problematic.There is no permanent mainline or front-end display with assigned pockets as in supermarkets or other channels.There is no established mechanism to process returns.