PoS trends

It is probably worth beginning this article by defining what we understand ‘point of sale’ to be. Anyone connected with retail promotions will have countless images and jargon associated with the area: wobblers, shelf talkers, shelf strips, FSDU’s, ICDU’s, parasite units, Newscubes, Till units, promo bays, Bogofs, etc etc. The list could go on!

It’s a weird and wonderful mix of jargon, but essentially we are talking about something fairly simple in theory (theory being the key word). It’s about what the consumer is presented with as they are considering parting with their cash in an environment where magazines are sold. The game we all play (as magazine marketers) is trying to push our brands to the forefront of consumers’ minds, grabbing their attention enough to warrant a place in their shopping bag / basket / trolley depending on the retail outlet.

There are some fundamental drivers and trends in the magazine market that have changed how and where the industry promotes its brands. Some of these, along with trends which might become bigger and more important in the near to medium term future, are proposed and discussed here.

Consumer shift from the High Street

It has been documented to death over a number of years, but probably the most fundamental change to how magazines are promoted is the growth of magazine sales in the grocery multiples. As more and more consumers are buying their magazines in grocers, it is no big surprise that publishers’ level of spend, and more importantly the percentage of their overall spend, has increased dramatically. The later being important as it means the pattern of spend across the retail landscape has changed considerably.

The combination of growing sales and good in-store discipline leading to strong compliance has led to demand in the standard rate card mechanics increasing significantly. Sainsbury’s are a great example of how a retailer in growth, combined with much improved in-store discipline has resulted in publishers acknowledging this by investing significantly in recent years.

These retailers’ standard rate card promotions are now at a place where they are a relatively safe bet to increase sales for the period of the promotion. What it has resulted in is potentially more generic buying of standard space. Newscube and till deals are easily the most expensive and budget sapping. This then results in there being less money and resource for carrying out more bespoke creative promotions in-store.

Playing a large part in the above are the restrictions marketers face from the corporate rules and red tape associated with promoting in the large grocers. Individual brands can have a difficult time getting anything agreed that is a little out of the ordinary, isn’t plastered in the retailers’ corporate colours and doesn’t contradict numerous operational rules and regs. That said, the retailers would argue that it’s precisely these rules and regulations that make for a strong retail environment and sales growth.

Pressure for return on investment

As the magazine market enters a tough period, characterised by declining sales in many, if not most markets, there is a natural squeeze on budgets and an increased level of scrutiny on promotional activity. The phrase ‘publishing for profit’ is something that is banded round a lot, and in a way encapsulates the mood of the industry.

On a title level, there are some key drivers which normally determine the type and scale of promotions executed. If a title is in its infancy, (launch / re-launch) the objective will be to build awareness and trial which, when combined with large circulation aspirations, will result in heavyweight activity, which is where the more creative, bespoke activity normally occurs.

If you then consider that the rate of new (particularly large scale) launches into the magazine market is slowing, then it is fair to say that the number of ‘big splashes’ of spend is not likely to increase in the future.

Declining market: working harder for sales

In a declining market, publishers are looking increasingly to optimise their investments in space at retail, by building extra layers to their promotions to maximise the sales and RSV benefit. Summer mag packs (a group of titles packaged for a discounted price) and ‘win your shopping for a year’, are two simple examples. Both highlight how the normal rate carded space is being worked harder and more creatively to drive sales of the titles involved.

Another driver leading publishers down this route is the fact that space in the large grocers is, in many cases, oversubscribed, and adding in extra layers of offers is a way of making a publisher’s proposal for space more attractive in the eyes of buyers. Smaller titles have been doing this for some time, by offering retailer exclusive product (a bespoke gift or offer). If the demand for space in the large grocers is set to stay high, and all the indications are that it will, then this trend will continue.

POS - What’s new?

It is easy to take a cynical view of what ‘new stuff’ is out there or what will come in the future. A recent project group within a major publisher was set the task of finding new and creative ways of promoting magazines at retail. The first efforts of the group centred around briefing existing magazine industry POS suppliers to come up with the ‘next big thing’. The results were fairly depressing, and seemed to basically involve an FSDU with some variation on a TV / plasma screen in it. It turned out the problem was not with the POS Suppliers, who are extremely good at producing display solutions. But, the solution to the problem was not going to be found in a nicely shaped FSDU with flashing lights and which made strange noises when you walked past it.

What is needed is a deeper analysis of consumer behaviour in-store. What are they thinking? What are their journeys around the store like? What are they consciously taking in? Are there subconscious levels of influence? Only by digging down to this level of consumer insight is there any chance of coming up with the next ‘big thing’. But, as markets become ever more competitive, publishers will have to look deeper and carry out more in-depth retail focused consumer research in order to find new ways of promoting at retail.

Better consumer insight

Publishers now have access (for a price) to extremely powerful information about their consumers. The most developed in the UK is dunnhumby who look after all of Tesco’s Club Card data. The data has two main uses. Firstly, there is a large amount of insight to be gained on our readers and how they interact with our brands. Everything from cross shop details, frequency of purchase and average basket spend, to share steal of competitors following a promotion. This is just some of the information that can be analysed and the results used to build stronger, better informed promotions, and not just in Tesco. The general insight can be fed into creating promotions in other retail environments.

The second big area that publishers are investing increasing amounts in is using loyalty scheme data to carry out extremely targeted sampling / money off promotions. Again dunnhumby / Tesco are currently taking the majority of publishers’ spend, however Sainsbury’s are close on their tail with their Nectar Card data.

The level of detail which segmentation campaigns can now drill down to is considerable. As an example, it would be entirely possible to run a promotion using Sainsbury’s Nectar Card data targeting consumers who are female, aged 30-45, have not bought your title in the last 12 weeks, but have bought competitors’, live inside the M25, and buy predominantly organic food.

At the moment, only two retailers hold this level of information to such a sophisticated degree. It will be interesting to see if other retailers develop a similar offering. It would be fair to say that it is harder to get insight into male orientated brands through grocers’ loyalty schemes, as young male consumers are not quite so well represented. As a result, the majority of spend in this area is likely to come from titles aimed at women.

Dot.com promotions

Online home shopping is obviously a huge growth area for retail, and is an area that magazines have started to take advantage of. Magazines were initially something of an afterthought on some of the grocers’ online offerings (positioned deep within the ‘pets & homes’ section of one leading retailer’s site!!!).

However, indications are that the promotions that lift brands onto the grocery homepages and ‘special offers pages’ can offer some fairly impressive sales uplifts. One big advantage with online promotions is that the whole area of in-store discipline and compliance is not an issue. It takes a lot of the risk out of setting up the more complex promotions and offers.

There are still some pretty basic wins to be made for magazines being sold online through major retailers’ websites; for instance, putting the titles in an obvious place, advertised at the right price is one! But, as the growth continues and more people convert to online shopping, no doubt spend and resource from publishers will follow.