Seismic change in a prehistoric world

Two words echo through the news items in this issue of Wessenden Briefing…‘seismic’ and prehistoric. ‘Seismic change’ is a phrase that has been used repeatedly to describe what happened to UK grocery retailing last year. By contrast, a magazine subscriber contacted in Dovetail’s Subscriber Service Survey described the service he received from a publisher as “prehistoric” – he had to wait three months for the first issue delivery of an alternate monthly magazine. “When I can get a book from Amazon the next day, your service is prehistoric.”

That subscriber was a Millennial. This issue is full of research which shows just how important this group is to the future of publishing; but also just how difficult they are to serve – demanding, questioning, value-conscious and often operating with a radically different mindset to the Baby Boomers who built the current media business. Add in the disruptive practices of an Amazon (who incidentally announced a full year loss for 2014 of $241m) or the German discounters, Aldi and Lidl (who are gouging share from the mainstream supermarkets), and the result is truly seismic.

The response of the grocers in general, and of Tesco in particular, has been swift and decisive, tearing up the race-for-space strategies and management structures which used to work in the old world. Supply chain innovation is a key part of that response: shopping apps; in-store beacon technology; dynamic ranges; new in-store experiences; fast turnaround of home delivery and click-and-collect based on end-to-end electronic location of stock; and so on. However, the response of publishers to seismic change has been much more mixed…

At the digital end of the business, there is great experimentation going on currently in terms of new subscription models. All-you-can-eat is the most high profile, but there are others too. Print subscriptions are also seeing rapid change, but in a more haphazard, bolt-on way which is causing some confusion among consumers and which raises issues about customer service. Slow first issue delivery is one very prosaic example of an industry which still clings to some pretty prehistoric practices, but there are some much bigger issues, the most notable of which is how long can the publisher subscription model rely on penalising loyalty? In an Amazon world, that looks unsustainable in the long-term.

Yet move on to the print newsstand, and the picture is much more disturbing. The fact that the industry has constructed a test to see what happens when newspapers are actually delivered on time through the supply chain must seem truly prehistoric to an Amazon, who is rolling out the one-hour delivery of physical products – including books – across US cities. A recent Association of Circulation Executives‘ poll on two important topics (“Can we afford Sales Based Replenishment?” and “Where should copy allocation sit?…with wholesalers or distributors?”) demonstrated two things. Firstly, that there is a real difference of opinion within the industry as to the answers to those two questions; but secondly, that there also seems to be little willingness to debate them, at least publicly. Add in the fact that as the nature of magazine launches continues to change (this issue features an analysis of the 245 consumer magazine launches in the UK in 2014), we are clearly not making enough noise about them to the consumer (recent research showed that only 10 per cent of magazine shoppers can remember seeing a new launch in a shop over the last two years); and there is a real need to sit down and talk properly about some big cross-industry issues.

Finally, what about two recent observations from the National Federation of Retail Newsagents? It is easy to dismiss the statements as being politically motivated, but the NFRN argues that there are two reasons why there is little serious progress or debate in the supply chain. Firstly, the publisher representatives involved in the debate are too junior to effect any change within their own organisations. Do senior publishing management know what is really going on in the supply chain? And do they care? Secondly, to quote the NFRN’s president, “We need to be having conversations with people who have got some life left…the people who set the way of working 20 years ago are not going to be the ones who change it!”

Baby Boomers managing a Millennial world? Dinosaurs trying to serve the Amazon generation? That is a scary and depressing view of our industry. Yet how true is it? Answers on a postcard please…

This article is the lead editorial from Wessenden Briefing – a subscription newsletter for senior publishing personnel about magazine and newspaper audience development in the UK. For a free, sample issue of the newsletter contact Jim.

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