Q: Why is copy allocation such an important topic?
A:With the current inflationary pressures driving up both production and distribution costs, it is vital that every copy within a distribution profile counts. Every copy needs to be allocated to drive sales whilst controlling the level of unsold copy. This will make the category more sustainable for all the stakeholders in the supply chain.
Retailers want sensible volumes of magazines that they can sell to help their cash flow. Too often in the past publishers adopted a strategy of allocating copies to as many retailers as possible without sufficient thought around demand. With data and systems being more sophisticated, we now have more confidence in printing fewer copies and focusing on placing copies where they are most likely to sell.
Q: What are the main dos and don’ts when it comes to copy allocation?
A:We believe that there are four key “dos” when it comes to copy allocation:
- Having people resource devoted to copy allocation – understanding publisher requirements, copy management, data, wholesale, and the systems being used is a specialised skill.
- Good data – resource needs to be allocated to ensure that all the data being used is as accurate and timely as possible.
- An approach to supply levels that ensures that you are taking into account any promotional or sales development initiatives.
- A strong review process to ensure that there are no issues down to individual store level.
In terms of don’ts, this comes at the beginning of the process. We believe that the key is to plan based on your expected sales by outlet, rather than starting from a headline supply figure. Sale is a function of Supply rather than the other way around.
Q: What is the cost of getting it wrong?
A:From a simple perspective, it is directly related to lost sales and more waste. When our products aren’t in the stores where our customers are looking for them, we are encouraging them to spend their disposable income on our competitors, or in other categories. During the cost of living crisis, people’s purchasing habits are already under pressure. Making our products harder to find is the wrong thing to do. On the other hand, publishers are also under unprecedented pressure in terms of input costs, so sending copies “out for the ride” is equally wrong.
Q: What is the potential benefit of getting it right?
A:Making the right copy allocation decisions, based on analysis of the data, allows publishers to print fewer copies whilst still achieving sales objectives. It means they are optimising their distribution footprint.
Put simply, publishers retain the revenue, whilst optimising their costs.
From a retailer perspective, getting it right means that shop staff spend less time managing returns and more time focusing on displays on shelf.
Q: What factors go into determining the optimal allocation?
A:The key to achieving an optimal allocation is to have an accurate national sales forecast and then understanding what supply is needed to achieve this.
There are several factors which will influence this.
- Recent sales history – provides a sound base for any allocation.
- Store level sales volatility – A store that sells 10 copies every issue has low volatility and therefore needs fewer copies to achieve their maximum sales. Planned unsold copies are placed based on where they are most likely to sell.
- Range – Most of the major retail groups issue ranges which restrict the titles that can be allocated to their stores.
- Seasonality – This relates to location seasonality rather than title seasonality. For example, most of the WHS Travel Airports will see sales increases in the peak holiday periods. Similarly stores located in prime UK and ROI holiday destinations will show similar sales patterns.
- Promotional activity – Understanding what promotions deliver in terms of sales uplift is essential in delivering return on investment.
Q: How can publishers and their distributors work better together to improve copy allocation?
A:Distributors now have huge amounts of data which provides invaluable insight into how best to achieve a publisher’s copy management objectives. Managing this data and providing clear and concise reporting is a key task for any distributor but the real value is added in having people who can understand and interpret it to aid how supplies are allocated across the retail estate.
Q: What’s in the pipeline from Marketforce?
A:In May, we launched Apex, our next generation allocation system. Apex provides complete control of magazine allocations at outlet level, delivering dynamic demand planning, allowing sales and profitability to be maximised for both publishers and retailers alike. Marketforce are utilising and leveraging Apex’s new capabilities to support the magazine market at the newsstand for all stakeholders.
We will continue to invest in building additional functionality to help drive profitable sales. With in-house support and development resources, work has already started on phase 2.
With more than 30 years of experience, Marketforce leads the way in global sales, marketing and distribution for a wide range of publishing and media businesses. Owned by Future PLC, we are backed by one of Europe’s largest and fastest-growing media companies.
We are the #1 independent publisher newsstand distributor. Distribution is our core service, but our focus is also on helping publishers build their businesses through adding value. We aid product development, help determine optimal pricing and deliver customer marketing for brands that grows sales. If you would like to hear why more publishers are choosing Marketforce, call us for a chat about getting the distribution you need.
Tel: 0330 390 7498