WELCOME

Suzanne Boyd, Editor-in-Chief, Zoomer Craig Sweetman, President, CRS media

Product/Consumer focus Magazine success story….. Leveraging the unique retail magazine sales environment.

- Anita Baldwinson, - Director, Retail Services/Marketing, TNG

The Marketplace Highlights from IAG (Industry Action Group) presentation at the 2017 MagNet conference IAG update

ANITA BALDWINSON, CARM ALFANO, CRAIG SWEETMAN, DEAN WALDRON, JERRY LYNCH

1 What’s Happening At Retail

Retail today is challenging at best

3 Books At Retail What’s working

4 Securing the

Future What’s already been accomplished

2 Magazines At Retail What place do print

magazines have at retail

5 Opportunities Continued work to ensure future

1 What’s Happening At Retail

Retail today is challenging at best

Bryan Pearson in

Forbes

What’s clear is the path of retail has

rarely been a straight one. The best

we can do for its future is to learn

by following in its footprints.

Retail Today Is Under Fire

Bricks & Mortar Retail Today

Challenging….

Sales

difficult &

moving

around

Across many

categories

Trips … if up, basket

size impacted

Trips... If down, then

they are down &

basket size down

Sales difficult

and moving around

Across classes of trade

Demographic Shifts

Non-majority populations

Major Macro Polarizers

• Source: Kantar Retail Analysis

Technology

New Generations

Geography

Urban Explosion

Incomes Diverge

Have/Have Nots

FACTIONAL FRAGMENTED FRACTURED The death of “average” in a splintered landscape

12.4 12.4

11.1 11.1 11.2 11.2 10.7

9.6 9.4 9.4

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Shopper Rationalization = Loyalty to “Chosen Fewer,” Unique

Retailers…

Average Number of Retailers

Shopped in Past Four Weeks* (among all primary household shoppers)

• * Inclusive of visits to stores and websites; averages are for Q1-Q3 of each year.

• Source: Kantar Retail ShopperScape®, January 2007-September 2016; kriq.com

Dispersion of Promo Opportunities

More, Smaller Points of Commerce

Threat

Recent Survey

Retail Execs

Now, a Firm Return to the Productivity

Loop…with an Added Focus: Baskets

“We’ve got to

win on baskets,

and the

economics are

not only in our

favor, but in the

customers’

behavior if they

shop a basket

at a time” -Doug McMillon,

October 2016

• Source: Company presentation, Kantar Retail analysis

17

Retailer Focus

Social Media

Consumer

Focus Differentiation

Digital Solutions

Watching Competition

Whole Store

Data Driven

SALES SALES

SALES

Profit - $$$ or %

Loyalty/Retention

Basket Size

Price Competitive

FREE UP CAPITAL

Traffic/Trips Long term focus

Control Costs SKU rationalization

Inventory | Labor | Space

Scale Matters

Traditional | New…. Aldi Lidl | DIGITAL | AMAZON

Fresh

On-line

2 Magazines At Retail What place do print magazines

have at retail

What place and or role do

print magazines have at

retail?

Did You Know…

Readers of All Ages Enjoy Print

Canadians Prefer Magazines

88% 92%

Feel that it is important that a magazine have

editorial content specifically

created for them

Agree that Canadian

magazines play a significant role in

informing Canadians about

each other

90%

Feel that U.S. titles don’t

effectively cover Canadian issues

Canadian Magazines Have Staying

Power

9 Years

1, 200

Total number of magazine Titles have stayed above

English Titles French Titles

Source: Mastheadonline; Magazines Canada; Statistics Canada; CARDonline

Some Awesome Retail Sales

Retailer 1

$40K In 1 week

Retailer 2

$199K In English

Mags

$425K

$550K Quebec Retailer

Just Some of the Titles That

Resonate

ME-Time

Print offers escape from hectic lives. Curl up & have

an experience with favourite

Collectable

Premium content that the customer will pay for and

save

Tactile & Addictive

Feels good beneath the fingertips and is an

immersive experience

Just Some of the Titles That

Resonate

Bookazines are up +25% $

High quality, not price sensitive, growing category

Sell Through Average 47%

Top-selling issue with +75% sell through in areas

+26% $, +8% Units

In 2017, so far, the higher retail price helping Star

Field Agent Consumer Survey June 2015

Sought After Connection to the

Consumer

read

cover physica

l

article

s interesting

pages

coupons picture

s

time

good

want

feel

something

interested

story look

recipes get

use

take

easier copy

interest

save keep

reading

able

price

articl

e

Simply Great Product

3 Books At Retail What’s Working

Stable Canadian Book Market

Reader Discovery

Where were you browsing/searching when you became aware of this book? (N=2,690) How Canadians Buy Books 2015, BookNet Canada (September 2016)

WHERE WERE YOU SEARCHING?

45% PHYSICAL

STORE

Why is it Working?

Seasonal Displays

Holiday Endcap Mother’s Day Endcap Seasonal Gondola

Move on New & Hot Categories

1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49 51 1 3 5 7 9 11 13 15

Retail Retail

Linear (Retail)

Adult Colouring

The “Suggested” Purchase

Read of the Month

Pick of the Month

Book of the Month

Showcase Pick

Media Tie Ins

Data and Replenishment

Demand

Supply

Transport

Inventory Planning Process Safety Stock

Reorder Level Order Up-to Level

Order Quantity

Service Level

Flexible Display Space

Topper Program Display What’s Hot Right Now

In the Midst of Every Crisis

Lies Great Opportunity

4 Securing the Future What’s already been accomplished

The Good News to Build On

Product that is extremely profitable to

retailers

1

2

3

5

We are still here despite

the loss in volume

There are still significant category

sales

A supply chain that has

wrenched out costs

Retailers looking for

help

4

Industry Initiatives

SBT FORMED IAG RDA

Inventory

Industry Action Group Group of industry participants from the supply chain. Publishers, Distributors,

Industry Association Leaders, Wholesalers, Consultants

Pass-Through RDA Simplified the system and highlighted retail discounts to retail more clearly.

Scan Based Trading Retailers no longer own the

inventory

5 Opportunities Continued work to ensure future

Remove

“Dead” from

vocabulary

84% More

engaged with ads

Digital will lose ad budgets (eventually)

New print start-ups +

digital publications

returning

Retail looking for profitability & consumer connection

Reader demand

is still strong

Raise Expectations

• Expect to grow not to fall

• Seize opportunities to do more

• Incorporate digital to help sell more print

• Engage & communicate with retail at all

levels

Communication is Key

Shopper Survey

Develop Resources

Promote

Brand-Spark Canadian Shopper Survey

Communication Tools

Tools for interacting individually & collectively

Newsstand Build upon momentum

A changing and evolving environment is creating

opportunities

Retail is changing

• Grow sales profitably • Complement the go-to market

strategy • Drive trips and or basket size • Energize Consumers

Demand for Categories

• Focus on consumer differentiation and loyalty

• Quality publications are exciting

Magazines Can Answer

Product/Consumer focus Books… How We Did It: The Subban Plan for Success In Hockey, School and Life.

Karl Subban, Author

Scholastic Canada Kathy Goncharenko, Vice President Trade Sales, Kristen Myhill, National Account Manager, Sara Labrie, National Account Manager, Scholastic Canada

Children’s Books Impact, Trend, Insights and Opportunities

Tom Worsley, President & General Manager, RS2

The Numbers What does the data tell us about the opportunities.

What’s Your Number

What’s Your Number ???

What’s Your Opportunity $$$

What’s Your Number ???

Magazines can generate some of the highest margins of any category that you carry in your stores.

What’s Your Opportunity $$$ By simply applying the known best practices to the magazine category, you can easily grow the sales and that means growing your margin dollars

Basic “best practices” Checkouts - optimum # of fixtures in store, optimum # of pockets on fixtures - right selection of titles for your locations - categories need to share point of sale space effectively - self scan /que line solutions Mainlines - location in store, size of fixture relative to store volume and traffic Other Displays - permanent promotion vehicles - short term in and out opportunities to support special events

Basic “best practices”

Merchandising - are displays blocked by floorstands, clip strips - are displays being dressed, corrected during the shopping day Sales Promotion - price discounts, coupons, multiple purchase discounts - incentives such as loyalty programs, tie-ins to other products Communication - Category Managers and National Account Managers need to be effectively engaged - are category trends and opportunities being communicated retailer magazine managers - are promotion or special opportunities being communicated to stores

What’s Your Number ???

Magazines can generate some of the highest margins of any category that you carry in your stores.

What’s Your Opportunity $$$ Large multi checkout retailers with both checkout and inline fixtures can easily generate margins of at least 35% and have the potential to grow that number up to as much as 40% when all of the revenue and cost reduction components are included.

Are Retailers including of all of the funds that the Magazine Category contributes when they calculate their magazine margins ?

Cover Price Discount

Volume Rebates

RDA (now included in Cover Price Discount)

Promotion Funds

Checkout Pocket Payments

Inventory Cost vs SBT

Merchandising Costs

THE CHALLENGE

Retail Personnel who are managing the magazine category and those of us who are calling on these people, need to ensure that all of the benefits that accrue to the retailer from our category are effectively communicated.

These amounts can be measured monetarily and should be included in the margins calculations.

Scott Gosse, Director, Information Technology, Coast to Coast Newsstand Services

The Numbers What does the data tell us about the opportunities.

Insights from the CTC Box Score\CTC Cognos system.

Matthew Holmes, CEO, Magazines Canada Craig Sweetman, President, CRS Media

Canadian Consumer & Retail New Canadian Retail & Consumer Insights.

Peter Olson, President, TNG Canada Bruce Sherbow, SR VP, Penny Press Matthew Holmes, CEO, Magazines Canada Tracey McKinley, Magazines & Circ Publishing Consultant

Now What ! Wrap Up Panel

Thank You