MPA (now known as Magazine Networks) Code of Conduct Pilot results which were compiled by independent third party Boston Analytics were recently shared with the ACCC.
For background, Pilot A stores, with the optimized supply and merchandising support, started June 8th, while Pilot B stores, with only the optimized supply, commenced August 10th. This report provides a final assessment using 6 months of data for Pilot A (8th Jun 2015 to 7th Dec 2015) and Pilot B (10th Aug to 9th Feb 2015).
Both pilots showed substantial reductions in Rate of Return. Pilot A rate of return dropped from 47.8% to 38.7% or 9.1 points and pilot B dropped from 47.7% to 38.5% or 9.2 points Year to Year. This is a substantial improvement compared to the same stores’ flat historical performance and compared with the control group.
Boston Analytics expected sales to decline at an 8% given the amount of supply that was cut from the long tail. Pilot A (excluding outlier store with new subagents) and Pilot B both delivered -10% and -13% declines in sales.
Qualitative results from a survey conducted by Boston Analytics with the participating newsagents indicate a positive reaction from the stores especially on reduced rate of return and reduced labour costs and complexity. However the sales decline was a clear negative.
At its conclusion the pilot has highlighted the level of complexity within the newsagency channel supply chain and that stores have major differences in the role the magazine department plays for their overarching business strategy. It is clear that there is not a one-size-fits all solution. The next phase of Destination Newsagent is to build on these findings and draw on more data points to further identify where efficiencies can be made. Gordon and Gotch are leading the way in this and are seeking channel input through their recently launched survey.
For a copy of the full report, click here