By Karlene Lukovitz
Editor, MBR Daily Publishing & Retail News
Time Inc. Retail (TIR), a major force in the newsstand industry for decades, currently has an approximately 20% share of the national distribution market.
In addition to Meredith Corp.’s titles, and the former Time Inc. titles Meredith acquired earlier this year, TIR’s clients include National Geographic, Bonnier, Active Interest Media, Rolling Stone and other U.S. publishers, as well as U.K.-based companies such as Future plc, Imagine Publishing and the magazine distributor Marketforce.
In a recent interview with MBR Daily Publishing & Retail News, Chuck Howell, senior vice president of strategic sourcing, production and newsstand operations for Meredith, discussed Meredith’s plans for TIR and supporting the retail channel.
Howell, who joined Meredith from ADP in 2001, added oversight of newsstand operations to his corporate sourcing and production roles more than six years ago.
Here are highlights of Howell’s comments during a wide-ranging discussion.
TIR: Strategic Vs. Tactical Functions
“After acquiring Time Inc., we took nine months to do a thorough assessment of TIR and everything they provide,” Howell reports. Meredith had been a client of TIR for most ND functions for many years.
TIR has long been the “800-pound gorilla” in the newsstand marketplace, in no small part because of the clout of People, the #1 celebrity magazine by dollar sales, Howell notes. “TIR has served as a steward — it’s done a great job of championing the newsstand industry and trying to evolve it,” he adds.
Most important for Meredith, other clients and the channel, he says, TIR has an array of advanced capabilities and “a huge amount of talent.” These strengths, and a desire to minimize marketplace confusion, are behind Meredith’s decision not to rebrand TIR, he reports.
At the time of the Time Inc. acquisition, Meredith was in the midst of an RFP process in the ND area, which involved assessing the capabilities at Comag, as well as TIR, Howell explains.
“Ultimately, we decided to keep what we consider the strategic functions at TIR — functions that are differentiators for us in the newsstand channel. Those include TIR’s state-of-the-art analytics and marketing teams, including the shopper marketing team that gives us a leg up in creating our messaging for retail. We’re also retaining central order regulation, meaning core distribution and allotment functions.
“At the same time, we are outsourcing for Meredith, and subcontracting for our third-party clients, the less strategic, more tactical functions,” he explains. Specifically, billing and collections (already outsourced in recent years) will now be handled by Comag’s Genera division. In addition, Meredith/TIR is tapping Comag’s field force to handle day-to-day sales functions and interactions with retail buyers.
TIR’s senior sales executives will focus on strategic discussions and relationships with retailers and channel partners, including Comag, wholesalers and key vendors.
When it comes to the magazine category, retailers have often been presented with conflicting recommendations — and that, coupled with sales declines, tends to put the category at a disadvantage, says Howell. Over the years, industry partners have discussed various ideas and initiatives, but implementing these to “move the industry forward” has been problematic, he adds.
The new TIR/Comag relationship should allow for “taking the fight upstream” — that is, enabling TIR, Comag and other channel partners to work through their issues first, informed by TIR’s analytics and marketing expertise, and emerge with an empirically based analysis that can then be taken to retail, Howell says.
“By using empirical data and analytics to drive order regulation, marketing messaging and devices, and recommended planogram designs, we believe that we can work together to reach optimal solutions and take much of the ‘noise’ out of the system," he continues. "Then the Comag sales force will actually deliver that into retail. The end goal is making it easier to get the attention of the right people at retail. If analyses and recommendations are empirically based, the right products are going to be there for the consumers who want that content, and the entire supply chain, from the publisher through the retailer, wins. We need to focus on delivering the content that resonates with the reader, and what makes the most money for the entire supply chain.”
If a “fundamentally different or unique” retail opportunity is identified or developed, it might make sense for TIR sales executives and Comag executives to “go hand in hand into the store to deliver that message,” Howell adds.
Will Meredith be looking to expand its third-party client base? “As noted, we want to focus on core competencies — we don’t, for instance, want to be in the billing and collections business,” Howell says. “As contracts come to term, we can have conversations about the value that our analytics and marketing people and capabilities offer.”
Commitment to the Channel
The overall integration of Time Inc. into Meredith will in total reduce the combined workforces of the two entities by about half, to 5,500. Meredith has told investors that it will reduce costs by about $500 million through functional and product consolidations and other operational efficiencies.
While the changes within TIR have resulted in the elimination of some 50 positions (mostly field sales staff), Howell again stresses that the goals are strengthening TIR and optimizing consumer offerings and profitability across the channel.
“What we’re doing is better scaling the TIR business inside our own walls, without detriment to the channel,” he says. “On the contrary, we think this is one step in the right direction toward improving the channel, and streamlining the communication into retail.”
Improving the channel is very much in Meredith’s interest, Howell emphasizes. “As the owner of the legacy Time Inc. brands, TIR and the newsstand matter to Meredith," he says. “People magazine and the number of pockets and SIPs that the legacy Time Inc. brands put into the market matter. Newsstand can’t be an afterthought for us. It's absolutely front-and-center on our radar, because it drives a lot of revenue. We’re not going to marginalize newsstand. If anything, it’s at the table within the new, larger Meredith.”
“While we’re aware of the declining sales in the newsstand like everybody else, Meredith is bullish on the SIPs and bullish on any new content that we can take into the market that’s going to resonate with readers,” he says. “In the end, delivering content that resonates with readers is what it’s all about. Our editors continue to understand the market and what readers want.”
“The most recent example is The Magnolia Journal, one of our most successful launches in history. People are absolutely buying it at the newsstand — it’s a great channel for delivering that content. In addition, I don’t think it’s a secret that the single-copy sales of our SIPs are actually up year over year.”
Meredith continues to be committed to investing in high editorial and production quality, and the trust that it’s earned with women by delivering relevant, valued content in categories including family, home improvement, cooking and gardening is key in driving retail success, he says. (Meredith, like other large publishers, contends that a low entry bar for lower-quality, imitative publications is counterproductive for optimizing overall newsstand performance. “At some point, that will need to rationalize,” asserts Howell.)
Identifying, Leveraging Opportunities
“TIR's marketing team is, as always, working on new sales-enhancing initiatives/concepts, and Meredith and TIR are committed to working with retailers and other channel partners on such efforts,” sums up Howell.
Case in point: “Our marketing, analytics, and distribution teams are interested in collaborating with our supply chain partners to discuss and implement flexible display,” he says. “Given that display is at a fixed cost in a challenged channel, we would like to assess the strategy of rotating more of our portfolio products through. For example, Shape and Real Simple might stagger on-sales every two weeks in sharing display, to respectively take advantage of weeks one and two, when the majority of copies are sold each month. Proper empirical planning and execution would result in increased variety and product penetration for consumers, and revenue for retailers and wholesalers.”
“Meredith is very excited about the TIR analytics team: the incredible talent and amazing amount of work and product that they can deliver, not just to Meredith, but also to the rest of their clients,” he says. “Cover analytics and cover best practices are just one example.”
Another is employing data and analytics to help better manage the balance between the retail and subscription channels, so as to optimize consumer revenue for Meredith, retailers and other channel partners. Newsstand buyers are particularly valuable, and “a lot of the information we can gain from the newsstand channel can enhance our overall marketing, as well,” Howell points out.
“The shopper insights group is also second to none,” he continues. “They understand what drives purchasers of magazines at retail. They support the category managers at retail with information to better market their products, with insights not just into magazines but also other products at retail.”
Among other points, the TIR shopper marketing team’s sophisticated in-store research confirming that advertising in print brands sold in supermarkets actually drives lifts in sales of the advertised products aligns nicely with Meredith’s groundbreaking ROI guarantee to advertisers.
“What we call the ‘legacy Meredith’ brands are also excited about TIR’s central order regulation capabilities — getting the right number of books in the right pockets,” adds Howell.
“Improvements are being made to that process through the analytics and marketing teams. They’re looking at the data every single day. And while I can’t reveal specifics yet, they have an idea that just might tweak the distribution allotment process to make it more optimal for the publisher, retailer and all concerned.”
Meredith, which has in recent times acquired a variety of data-driven marketing, analytics and digital media companies, is “always looking for opportunities to find synergies” among its assets, Howell sums up.