Q: How important is it for clients to understand their consumer?
A:Consumers are the heart of our industry, and it is our job to see how they shift their behaviours. Using our data and insight we can build a story for clients which they can use to help shape future strategies. One of our largest audiences, ‘Perennial Women’, was the subject of our latest research webinar where we showcased how important these consumers are for our business. Perennial women aged 55+ make up one fifth of the UK population and one quarter of magazine consumers. These empowered women stay in work longer to maintain their disposable income. Their role and responsibility are at the centre of families and communities and they take an active interest in product choices.
Over a third of these women are open to new or different products. Publishers that are quick to react to their ever-changing behaviours will endeavour to capture their attention and maintain their loyalty through the newsstand.
Q: What other consumer segments are you monitoring closely?
A:We monitor all consumer segments, but we like to track future predictions and what this means for magazines. It allows us to think ahead. Lifestyles have changed drastically, and we are seeing people re-evaluate what’s important for the future. Four main pillars covering quality, convenience, value, and technology will be closely observed over the next 12-18 months.
Q: There has been lots of talk about NFTs recently. What is the potential for publishers?
A:Let me first explain what an NFT is. It stands for Non-Fungible Token. It is a unique digital token which is used as a certificate of authenticity. These unique digital assets can be digital video clips, digital trading cards, online articles and, fundamentally, anything with digital code. Although NFTs have been around since 2014, we’ve seen interest spike in 2021. And of course, publishing is jumping on the bandwagon and producing their own NFTs. It was reported that Time Magazine sold digital front covers for over $200k and The New York Times sold an NFT based on an article about NFTs, for $700k.
It sounds daunting but with the right approach, it can be done quickly and effectively using a cryptocurrency platform. Most publishers will have access to digital magazine formats and this could be another avenue to capitalise on additional revenue. Not only will it open a new audience, but it creates global brand awareness.
Q: What are the dos and don'ts of managing price increases?
A:Pricing is a sensitive subject for publishers, but we’ve produced extensive research covering four areas:
- Dynamic pricing is a strategy we have seen in multiple magazine sectors. It allows publishers to set flexible prices for magazines based on current market demands. For example: The Children’s sector will have various price points across a year. During the summer, price points will increase by £1 or more. It shows people are willing to pay for high priced products during peak seasons as the demand is higher than usual. Other magazine sectors adopting this method have seen revenue benefits.
- Premium priced issues offer consumers a high-quality product at a higher price point than a standard issue. Customers are far more likely to accept higher prices if they are getting something extra in the bargain. Premium issues could be in the form of additional pagination, cover-mounted gifts or supplements. We’ve seen national and retail exclusive premium issues increase over the years and these special editions are a revenue booster but also drive footfall to the magazine category.
- When it comes to price hikes, there is no magic number, but our research shows that approximately 10 percent is the average point where customers are stirred to respond. As always, many variables influence pricing. Magazines increasing lower than the 10% of the current cover price generally show a better return than titles increasing greater than 10%.
- Over the £5 barrier. Change out of a £5 is quite a conversation between consumers, especially when buying a pint in your local pub. Magazines are no different. We looked at sales performance when magazines went beyond the £5 barrier. In our study, cover prices increasing below £5 had a minimum impact on sales compared to magazines increasing price over £5. In niche markets, price is not a factor. In fact, customers see high priced magazines as good quality trusted media and are willing to pay for the content.
Q: In terms of overseas markets, where do you see the main opportunities and threats for magazine publishers?
A:Like the UK, most territories have seen a shift in the retail landscape towards grocery and online, and away from travel and specialist outlets. Travel outlets are still an area of concern both in terms of domestic travel and UK overseas travellers through airports. The continued uncertainty over summer holidays will also have an impact on the seasonal sales in the usual Med destinations.
However, there are undoubted opportunities for the right type of product, such as bookazines, to capitalise on the sales potential afforded by grocery and online retail channels. Global ecommerce channels will be one of the fastest in growth and we have also seen some publishers produce local language editions to tap into the wider domestic audience, which we expect to continue. On the whole, 2021 will still be impacted by covid but markets are starting to rebuild and the outlook for 2022 is that it will be the comeback year. The return of airport sales from travellers will help boost future magazine sales.
Q: Which magazine sectors do you expect to see growth over the next twelve months?
A:There has been an acceleration of consciousness on health and the environment and consumers want to live happier healthier lifestyles with a more holistic approach. Magazine brands offering this service will likely gain from consumers’ newfound passion and purpose. The Health & Fitness sector will be one to closely monitor and titles covering sustainability could be the winners of 2021.
Since the covid crisis, people’s homes have become their safe haven. Home Interest and Gardening sectors will continue to gain traction in the magazine world. Gardening is already seeing double digit year-on-year growth and isn’t showing signs of slowing. The long awaited sporting events of 2020 are already in full swing in 2021 and magazines covering these topics will help boost the Sports category.
Bookazines, a combined book and magazine format, is undoubtedly a revenue driver. These high price special interest products will cater for new and existing consumers. Another one we will be monitoring closely.
Q: How do you see the magazine sector evolving post-covid?
A:In our most recent research, we took a deep dive into the future of consumer behaviour and the change in retail landscape. While GDP is predicted to rise in 2021, but not to the extent of pre-pandemic levels, the current economic effect of the crisis has led to consumer polarisation. Half of the UK are trading up to buy more expensive products, while others trade down to cheaper versions and this will affect the overall magazine industry. In-store promotions catering for both types of consumer will inevitably be the way forward.
Supermarkets will always be the key driver for magazine sales. Publishers modifying in-store campaigns such as cross category promotions will help reduce operational costs while driving consumers to the newsstand.
The trend of City workers adapting to remote working will continue in the future. Retailers are responding quickly to this adjustment and are expanding with smaller format stores in suburban areas. Although magazine ranges are smaller than in conventional supermarkets, publishers will likely increase promotional activity in these formats.
For over 30 years, Marketforce has been a leading global sales, marketing and distribution specialist working with a wide range of media and publishing 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. Working with a broad cross-section of publishing and media business clients, we have expertise across all areas of the magazine market. If you would like to hear more on our research, call us for a chat.
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