protecting the route to market - when retailers want to take control
DESCRIPTION
PROTECTING THE ROUTE TO MARKET - WHEN RETAILERS WANT TO TAKE CONTROL. Sally Cartwright HELLO!. CIRCULATION 502,679. Source: ABC July – December 2000. THE COST OF POSTAGE NO TIME ADVANTAGE THE AVAILABILITY OF NEWSAGENTS. HELLO! SUBSCRIPTIONS. HELLO! RETURNS 18%. 25%. 34% UK INDUSTRY - PowerPoint PPT PresentationTRANSCRIPT
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PROTECTING THE ROUTE TO PROTECTING THE ROUTE TO MARKET - WHEN RETAILERS MARKET - WHEN RETAILERS
WANT TO TAKE CONTROLWANT TO TAKE CONTROLSally Cartwright
HELLO!
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CIRCULATION 502,679
Source: ABC July – December 2000
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• THE COST OF POSTAGE
• NO TIME ADVANTAGE
• THE AVAILABILITY OF NEWSAGENTS
HELLO! SUBSCRIPTIO
NS
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HELLO! RETURNS 18%
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25%
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34%UK INDUSTRYAVERAGE
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THE ENVIRONMEN
T AND THE MAGAZINE
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USA/UK/GERMAN MAGAZINE USA/UK/GERMAN MAGAZINE MARKET COMPARISONMARKET COMPARISON
US UK Germany
Total Market Value (US $M) (Circulation & Advertising) 25400 5400 8300Circulation Market Value (US $M) 9900 2600 3600Circulation revenue per capita (US$) 36.6 44.0 43.6% Retail Sales 21 89 52% Subscription Sales 79 11 45Retail Sales Value - RSV (US $M) 2500 2310 1860% Sales Efficiency 35 70
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UK MAGAZINE MARKET UK MAGAZINE MARKET RETAIL GROWTHRETAIL GROWTH
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
% C
hang
e ye
ar o
n ye
ar(@
199
9 Price
s)
Source: Wessenden Marketing, JM \ SD \ WHS wholesale data
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UK RETAIL MARKET SHARES 1993 - UK RETAIL MARKET SHARES 1993 - 20002000
S'mkts High Street Indep CTN Mult CTN/Conven Travel
1993 2000
New Entrants have gained Significant Share at the expense of the traditional sectors.New Entrants have gained Significant Share at the expense of the traditional sectors.
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UK MARKET DYNAMICS - UK MARKET DYNAMICS - PUBLISHERS/DISTRIBUTORSPUBLISHERS/DISTRIBUTORS
•Retail market value growth slowed to 1.5% from 10%.
•Number of Consumer titles grown by 45% in last decade to 3,200.
•Industry unsolds costs now $230m.
•Publisher/Distributor consolidation.
•Subscription sales still only 11% of market
•Internet “bubble-burst” means investment back into printed media.
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UK MARKET DYNAMICS - UK MARKET DYNAMICS - WHOLESALEWHOLESALE
•Wholesaling is a relic of the former dominance of the local newsagent.
•Market value growth over the past ten years has supported profitability.
•The wholesale sector will continue to concentrate.
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UK MARKET DYNAMICS - UK MARKET DYNAMICS - RETAILRETAIL
• Outlets selling Magazines grown by 30% in 7 years
• New sectors growth
• Supermarket sales growth will slow
• Multiple retailer frustration
• Independents are intrinsically marginal businesses.
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WHAT’S HAPPENED IN WHAT’S HAPPENED IN THE LAST 12 MONTHS?THE LAST 12 MONTHS?
• Tesco/WHS announced “National Direct” in March 2000
• PPA/NPA fought back
• Tesco dropped ND in October 2000 - consensual industry approach
• WHS dropped ND in Dec 2000
• Industry “8 point plan” agreed
• WHS announced planned sale of Wholesale arm in Feb 2001
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RETAIL REQUIREMENTS FROM RETAIL REQUIREMENTS FROM BLUEPRINTBLUEPRINT
IMPROVE CONSUMER
OFFER
REDUCE WASTE
SIMPLIFY SUPPLY CHAIN
INCREASE MAGAZINE
SALES
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THE BLUEPRINT - A THE BLUEPRINT - A NATIONAL SERVICE OFFER NATIONAL SERVICE OFFER
Retail Store
Regional Wholesalers
Printers Retail HQPublisher/Distributor
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CPU ELEMENTSCPU ELEMENTS
• Allocation system, including SBR system.
• Information Warehouse.
• Central invoicing and cash collection facility.
• Central customer service facility.
• Simplified in-store handling systems
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SUMMARYSUMMARY
• Magazines doing well
• Facing up to major challenges
• Diversifying successfully
• Print on paper will be major revenue stream for many years to come
…and to close…just look at two new sectors
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2,030,498 EVERY MONTH
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7,900,000 EVERY MONTH
Source: ABC July – December 2000