We have been working on a code of conduct pilot, together with the distributors Network Services and Gordon and Gotch, in relation to the supply of magazines in newsagents. The aim of the trial is to improve the current magazine practices and make it easier for newsagents to manage magazines.
Just to remind you, we have 2 groups of pilot stores. Pilot A, with the optimized supply and merchandising support, has started June 8th, while Pilot B stores, with only the optimized supply, has commenced August 10th.
Under an independent agency, Boston Analytics, these last two months have been focused on getting the right baseline data, so they can analyse the pilot results.
There are 3 elements to the analysis:
1) Quantitative analysis of distributor data including 3 years of historical data
2) Quantitative data from the POS providers including 3 years of historical data
3) Qualitative interviews with a sample of the pilot stores.
The quantitative historical data is almost ready and the distributors will be providing Boston Analytics with the first 3 months of the pilot data end of January to conduct their analysis in February.
The qualitative interviews have been conducted by Boston Analytics with 8 store owners from Pilot A. Below is a summary of the output:
All stores reported dramatic efficiency gains due to minimal returns
– Significantly reduced processing time from delivery to shelf
– Reduction of clutter in the store and the ability for display more full faces
– There will be cash flow gains
Views on reduced range were mixed:
– Smaller stores are generally positive – “We are selling stuff we had but customers couldn’t find” [small store]
– Some larger stores believe the reduced range has cost them sales – “We are a point of destination for magazines – they pulled out too many titles and we have empty spaces… we have lost sales” [large store]
– Other larger stores saw the need to reintroduce some titles – “Some titles are important for positioning for the target demographic – for example, Time magazine, the Economist. These are titles I don’t want to lose”.
Smaller stores are generally positive about re-lays – “I am a fan of the re-lay”
Larger stores raised various issues – “The re-lay was pretty amateurish. It was based on a fictional standard store…I think our original layout was better. They gave us toothed header cards [for magazine categories] – these are first generation design, we need to have headers we can move”.
In Summary, the pilot is seen as a step in the right direction – “Two months into the program, this is 100% improvement compared with the previous 25 years”
We continue to learn from the trial and thank those that participated for their valuable feedback and effort. We will continue to be transparent on the results and look forward to sharing the thorough findings and recommendations when they are finalised. If you have any questions, please don’t hesitate to contact Mary Ann Azer, MPA Executive Director