City and Regional Magazines’ “Darkest Hour” at Retail
Regional pubs need to be visible in the marketplace, but declining margins make it difficult to justify retailers' fees.
Okay, with a nod to Golden Globe-winning actor Gary Oldman, I was absolutely mesmerized with his role as the conflicted, complicated, and controversial Winston Churchill in the film “The Darkest Hour.”
So forgive the reach regarding city and regional magazines, but I have to ask the question, with regard to newsstand, is this our “darkest hour?” Do we abandon ship? Or do we forge ahead, stay calm and carry on?
By way of background, we have never denied a slotting fee request1—no matter how egregious. While spending money to lose money may seem a fatalistic and less-than-sound business strategy, the retail “billboard” philosophy makes sense. Your advertisers are in the marketplace, and they want to see your masthead everywhere they can.
Last year we received a request to support new checkout fixtures. We never approved it—because it was quite frankly ludicrous—and we would have had to justify the onetime fee by assuming an unrealistic sell-through increase (ROI) at retail (at one chain only) for years. We are still in legal discussions.
Not responding to the request/mandate seemed like a good idea until the retailer assumed approval, implemented and billed accordingly, and followed up with a collection strategy approach demanding payment despite the request never being approved in advance.
Having my own history as a merchant marketer (retail sales promotion), I understand the ideas of sales-per-square foot and sales via planogram facing (the organization of products on shelves in order to increase sales).
The real estate that we, as magazines in a retail environment, occupy is usually larger than the ROI can justify. This calls to mind a Churchill/”Darkest Hour” quote: “You cannot reason with a tiger when your is head is in its mouth.” Or can we?
Do city and regional magazines belong in the retail environment? Absolutely. We have the same local relevance of place as the (distributor less) newspapers you will find in all channels of retail sales (groceries, drug stores, convenience stores). It is often the one-size-fits-all RDA’s (retail display allowances)2 that are the impediment to success.
Is it heady to see my title next to People at a checkout? Sure. But just as we advise our sales teams to sell with conscience—for example, figuring out if a smaller restaurant can turn the tables enough to support an ad campaign—retailers have to see that declining sales and margins make it harder to justify egregious slotting fees, no matter how big your ego is.
1Slotting fee — fees charged by retailers in order to display a product—in this case, a magazine—on their store shelves.
2Retail display allowance — a financial incentive allowing retailers to claim a percentage of sales revenue in exchange for prominently displaying magazines on store shelves.