American Society of Magazine Editors

MPA CEO Sees 'Enormous' Opportunities for Retail Channel

By Karlene Lukovitz

Mary Berner, president and CEO of MPA-The Association of Magazine Media, kicked off 2013's Retail Marketplace conference in Philadelphia by refuting fallacies about magazines and emphasizing the "enormous" opportunities for mutual benefit for the magazine category and retailers if they collaborate and innovate.

"I’m not saying that there aren’t challenges, because there are–big, hairy challenges both in retail and in magazine publishing," Berner said. "But these challenges are only making us collectively more innovative, nimble, faster and ultimately stronger."

One key message was addressing some retailers' concern that publishers are becoming focused on digital at the expense of print. "Yes, today consumers are reading their magazines where, when and how they choose," she said. "And yes, with the adoption of mobile reading, in addition to print reading, the movement between and among devices and print by magazine readers will continue. Just as retailers have focused on striking the right balance between online and offline operations to best serve  customers and increase sales and profits, we see the ability to offer readers our magazines across platforms as an opportunity to reach more and new consumers, more deeply engage them in our brands, and expand our businesses.

"That said...print is the most critical part of that offering, for the simple reason that consumers are our future and consumers continue to love the tactile, 'lean back' experience of reading a print magazine because it is uniquely satisfying and immersive," she emphasized.

Magazine Readership Growing, Particularly Among the Young

The statement "magazines are dead" couldn't be further from the truth, Berner said. Magazines "don’t have a consumer problem...No matter what the Cassandra's out there say, the hard fact is that in an environment where all media compete in an attention economy, magazine media audiences across print, Web and tablet in aggregate are up."

She cited several statistics, including:

*Print magazine audience numbers are up 1.3% over last year, according to GfK MRI. Further, 91% of adults read print magazines, and levels among younger, readers are actually higher: 95% of 18-34-year-olds, and 96% of 18-24-year-olds, read print magazines.

*A recent survey of college students by Shweiki Media and Study Breaks Media found 90% read print magazines, 85% get ideas from print magazines, and 84% are buying items they see in magazines, and 89% are visiting Web sites they discover through magazines.

*195 print magazines were launched in 2012, up 7% over 2011, versus just 82 magazine closures.

Retail's Importance to Publishers

Berner stressed that statements to the effect that "the retail channel is no longer important to magazine publishers, and magazines are no longer important to retailers," are also "not remotely true."

"I’m not saying that with the lousy economy magazines haven’t had challenges at retail, because we, like most other 'discretionary' categories, have and continue to take hits," she said. "But we as an industry are working hard to build back our business because it matters to us. But more importantly, because it matters to our collective future – our customers.

"The retail channel is a critical part of our business, and [retailers] are our critical partners," she stressed. She noted that consumer magazines collectively sell more than half a billion copies every year through retail outlets; and that publishers spend tens of millions of dollars to secure space in display racks, in kiosks and at check-out.

Further, the retail channel is more often than not where consumers first discover, buy and start to develop passion and loyalty for magazine brands, Berner pointed out.

She also reported some highlights from a "retail omnibus" consumer survey commissioned by MPA in May.

Asked where they go when they want to buy a magazine, 60% of consumer respondents said that they go to a store--a significantly higher percentage than for other options.

This and the visibility retail provides magazine brands are why publishers continue to invest heavily in new, quality magazines, special issues and bookazines, Berner said.

"The retail channel is a critical one to magazine publishers–especially as we continue to innovate with new formats, ideas and technology-enhanced print experiences," she said.

Magazines' Value to Retailers

The retail-focused survey recently conducted for MPA found that among consumer respondents who generally shop for magazines in stores, 59% look for a specific magazine (making it a destination), and 41% buy on impulse if they see something that they like.

Fifty-nine percent agree that they look forward to seeing what’s new in magazines, and 53% agree that the “magazine section at my favorite retailer is a welcome stop, where the magazines are ‘fresh,’ weekly and monthly.”

Perhaps most significantly, nearly one-quarter of respondents said that if they couldn't find the magazine they wanted in a store, they would go to another store that carries it.

For retailers, magazines "provide a unique value proposition and connection" to their customers, which benefits retailers' overall P&L above and beyond the sales of magazines--and the magazine category's profitability and retail economics are impressive to begin with, she said. Magazines "have uniquely loyal consumer communities that are passionate about our hundreds of recognizable brands because of our content," and magazines' trusted content about key product categories drives retail traffic and enhances the overall retail experience, she added.

Magazines also connect to active, affluent, influential, early-adopting consumers who are particularly valuable retail customers, Berner noted. Nearly three-quarters (73%) are influenced to buy the products advertised in magazines, and many of those products are on retailers' shelves.

Innovations, Using Digital to Drive Retail Sales

"If we stay singularly focused on how to use technology and the expansion of magazine content across digital platforms to enhance, propel, and complement the print and retail experience, the future of the magazine/retailer partnership is bright," Berner said.

Rather than signal the end of brick-and-mortar retailing, or the magazine/retail partnership, the growth of digital commerce channels and content platforms can mark the beginning of almost "unfathomable" opportunity "to more deeply and widely connect with our mutual consumer to grow the whole pie of our businesses," she asserted.

Innovation is the key to future success for both industries, regardless of platform, Berner stressed, noting that AT Kearney's research showed that gum managed to perform better than most discretionary categories during the recession through product innovation (e.g., gum that whitens teeth, substitutes for hors d'oeuvres or claims to improve your sex life).  

Magazines, like gum, are subject to the growing phenomenon of "mobile blindness":  MPA research shows that up to 24% of consumers are looking at their mobile devices instead of leafing through magazines while waiting in checkout lines, she noted.

And like gum, magazines can and are innovating to tackle mobile blindness and other consumer behavior changes resulting from digital: "People haven't stopped chewing gum, and they won't stop reading print magazines or buying them at retail," she said.

Berner mentioned several examples of true innovation by magazines--the type of innovation that's essential in order for the category to stem recent years' retail sales declines and forge profitable new partnerships with retailers:

*Condé Nast’s Wired magazine succeeded with a licensed product display in Target stores, and its Lucky magazine boosted sales by offering exclusive video content from its editors via QR codes on covers of copies sold in Target stores.

*Hearst ran a successful co-branded promotion/display for Woman’s Day, Good Housekeeping and Belvita Breakfast biscuits in Hudson News airport and terminal stores. Hearst targeted a coupon program to consumers who were using mobile devices in airports: When one of many keywords were typed in a search, a link popped up providing a coupon that could be redeemed exclusively at any Hudson News store.

*Time Inc.'s People magazine leveraged its content to gain access to Kroger’s social, digital and in-store promotional vehicles. Time Inc. also used both digitized and printed airport boarding passes to distribute content and value offers.

*Meredith's Better Homes and Gardens has developed a highly successful partnership with Wal-Mart that now features more than 3,500 SKUs and produces nearly $2 billion in sales annually.

In short, magazines and bricks-and-mortar retailers are "alive and well, and we have a vibrant future ahead of us—collaborating, innovating, and standing united," concluded Berner.

Read the full transcript of Mary Berner's speech.