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January 16, 2020

Publishing News

Q&A: B&N Newsstand Director Krifka Steffey
Krifka Steffey, director of merchandise and newsstand for Barnes & Noble, "is determined to invigorate the newsstand and drive traffic in 2020. Her advice to industry leaders: "We should speak more positively about what’s happening in our industry and what's working and what’s selling. I think too often we’re still stuck in looking back instead of looking forward, and that doesn’t do anybody any favors." She's also enthusiastic about social media's potential: “I think social media actually should be giving the publishing industry, certainly magazine publishers, a lot of intelligence on what customers are paying attention to and what they like. And doing that virtually for free." Other excerpts from her Q&A with Samir Husni, starting with her outlook on magazines at retail: "The evolution that has already started within publishing will continue. That evolution is moving, certainly, toward higher quality and toward magazines becoming more of a luxury item, especially those that you would buy at retail versus what you’d receive at home by subscription. We’ve also seen major brands come down in frequency, while seeing new titles in the bookazine format, where they don’t necessarily have a “next issue,” they’re a very singularly-focused subject or something that’s hot at the time... [B&N] has been creating greater partnerships directly with our publishers--not only bookazine publishers, but also with everyday brands that anyone on the street could name--in terms of giving feedback on trends that we foresee coming. I don’t think anyone could have anticipated the Korean pop band BTS ending up selling a million dollars in products on our newsstand, but that came about through a partnership with various publishers and advising them. We’re seeing these things trending--like CD sales increasing--so what can we do to get on this trend? That’s a key part of why Barnes & Noble has been doing well with magazines. We’ve really been partnering with those publishers to see what’s coming... and we believe in it... because we've either seen data that supported it or we’ve seen customer trends. We’re better able to support that internally [through] emails, displays, or social media. But when we don’t know what's coming, when we get surprised by a cover and we sell out, I really feel that we’ve missed a great opportunity. Those collaborations make my job easier, since instead of having to react on the backend, I have knowledge on the front end... But there’s still a pretty large contingent of the business where there is no collaboration between publisher and retailer. And I know there are a lot of other retailers that are involved, but there still feels like there’s a disconnect in sharing trends and looking at data to produce products that customers are looking for... I think we have a supply chain problem. I often describe it as a giant onion with so many layers within it and so much complexity. And we certainly faced challenges in the actual delivery, logistics, data flow and analysis determining the right number of copies to the right places. But I also think our industry is very restricted in allowing new entries to the market. We tend to have a very consistent and almost, I hate to say, aging, workforce within our industry that doesn’t present new opportunities as quickly as we really need... [To drive change, B&N has] been looking at various ways that we can take in [new] magazines. We also have our own distribution center. Should we be distributing our own magazines? Should we be making our own magazines? We have a publisher partner, as well, so there are various things we’ve been thinking about. There are lots of opportunities out there, because we certainly see customer demand... The supply chain in general out there, for everyone, has gotten more complicated. We’ve gone through the various changes with UPS rates, and we have trucking from one depot to another. The printers are also an interesting component of all of this. I think this entire thing, from start to finish, has been in a state of flux. Nothing very consistent or reassuring... We definitely have a customer base that’s very loyal to [the magazine] category. We often see two magazines in a basket and we don’t necessarily see a book, so I do think the newsstand has its own traffic. When people look at our mainlines they say: Wow, you carry so many magazines.' But we sell about 90% of our assortment in every store. So when you see those... smaller-audience titles, they really do generate traffic to our stores... [Rate base-dependent] titles are no longer newsstand profit generators. For a lot of reasons we have those titles in-store because we know customers expect us to carry them, but in terms of newness factor or titles that are not available by subscription, that’s where those bookazines come in... If we continue to give away content online, then we can’t continue to expect people to pay for that same thing in print... The [most worrisome] challenge we face is with getting the right product that’s on trend at the right time.... [given] the speed to market challenges... And also getting the right volume of product into the right stores to service the right customers to avoid sellout... a sellout for me could be at one copy, could be at 10 copies, and that’s a lost sale opportunity. So that’s the piece that concerns me the most. It's less about attracting the millennials, or figuring out the next hot thing; it’s getting the right copy in the right place at the right time, which has always been our industry’s biggest problem."

Former B&N CEO's Filing Claims Firing Destroyed Career
PW: "In an opposition brief filed this week, attorneys for fired Barnes & Noble CEO Demos Parneros argue that the former CEO’s surprise 2018 dismissal was engineered on false pretenses by [CEO] Len Riggio [who allegedly blamed Parneros for the collapse of a B&N sale in 2018), and that a vaguely-worded B&N press release announcing the firing implied sexual misconduct, “lumping Parneros with the Harvey Weinsteins of the world,” and making the longtime executive virtually unemployable. The filing, supported by hundreds of pages of depositions and exhibits, comes in response to B&N’s motion for partial summary judgment on two of the three claims—defamation and breach of good faith and fair dealing—in a bombshell lawsuit filed by Parneros over his July, 2018, dismissal. In their motion, filed in November, B&N lawyers argue that Parneros’s defamation claim is without merit because the company’s press release announcing Parneros’s dismissal was “indisputably true”... with discovery now mostly complete, B&N insists there is no evidence that the company “acted in bad faith or with deliberate purpose” in depriving Parneros of his equity award... Parneros was given three reasons for his firing--his bullying of CFO Allen Lindstrom; a single allegation of harassment by a female co-worker; and allegedly undermining the potential deal to sell the company. But in the filing, Parneros insists all three claims are false"...

Vogue Singapore to Relaunch in Fall
WWD: "Vogue is launching its 27th country edition in Singapore, returning to the South East Asian city after a short-lived attempt in the market back in the Nineties, this time joining forces with publisher Indochine Media via a license agreement. Vogue Singapore, the next edition to follow right on the heels of the launch of Vogue Hong Kong last year, will take the form of a monthly print publication and web site. All content will be published in English and is to debut this fall, the two parties said Thursday"...


Retail News

Online Sales Drove Holiday Growth; Grocery Was 2nd Best
PG: "The National Retail Federation (NRF) has reported its holiday spending numbers: Sales during November and December 2019 grew 4.1% YoY, to $730.2B. The numbers exclude automobile dealers, gas stations and restaurants. This positive spending was largely led by online and other nonstore sales, which increased 14.6% over the same period in 2018. The next largest retail sector for growth was grocery and beverage stores, which were up 2.9% YoY. “This was a healthy holiday season, especially compared with the decline in retail sales we saw at the end of the season in 2018,” said Jack Kleinhenz, chief economist at Washington, D.C.-based NRF. “Despite a late Thanksgiving and worries about tariffs, the consumer didn’t go away. We’ve had months of strong employment numbers, high wages and strong household balance sheets. There’s no doubt that gave consumers a sense of confidence about their ability to spend, and they did their part to keep the economy moving.” The 4.1% growth rate reported this year is 2% higher than the weak 2.1% seen during the 2018 holiday season.U.S. Census Bureau data — including auto dealers, gas stations and restaurants — shows that overall sales were up 5.8% unadjusted YoY. December sales saw a boost this season, with the Sunday after Thanksgiving and Cyber Monday falling in the final month of the year instead of in November. Retail sales in December 2019 increased 0.5% seasonally adjusted over November, and were up 6.7% unadjusted year-over-year.Health and personal care store stales were also up, 1.6% year-over-year. Three retail segments, however, saw declines: Sporting goods stores were down 0.4%; clothing and clothing accessory stores were down 1.6%; and electronics and appliance stores were down 2% YoY."

Big Show Highlights Frictionless Checkout
MediaPost: At this week's NRF Big Show, "there were countless presentations in the expo area showing what the future of in-store experiences looks like," writes Chuck Martin. "The Intel booth alone aggregated a wide range of companies using products that include Intel technology, all of which are targeted to retail stores. Frictionless checkout was a recurring theme at the show, and companies at the Intel booth presented different variants of it. UST Global, CloudPick and Retail Business Services demonstrated automated checkout using computer vision, motion detection, product sensing and recognition and payment integration. The idea is that a shopper with a phone picks up products in the store and walks out, being automatically charged, much like the Amazon Go automated stores. Hisense showed a modular point-of-sale kiosk that allows payment by facial recognition. A loyalty shopper would be identified by facial recognition as they enter the store, the products selected would be tracked and the shopper would simply look at a screen to be automatically checked out. A system by Flooid showed a checkout system with a high-precision scale to weigh selected products at checkout and a camera to automatically identify the products being purchased. The system also can catch if a product goes by but is not scanned to be charged. Retailers still have to purchase and install such systems, which is what companies like these and many others were pitching to retailers at the NRF event.Cameras and sensors are coming to retail in a major push.The only questions left are the timeframe and the cost. This technology is sophisticated, but not cheap."

More on Target's Holidays: Grocery Was A Bright Spot
PG: "Target Corp. grew market share in food and beverage categories during the holidays, but that wasn't enough to offset weakness in other key categories, leading the big-box retailer to slash its quarterly sales outlook.In addition to food and beverage Target said that it saw continued strength in apparel, beauty and essentials during November and December. But electronics, toys and areas of the home goods department were below planned performance, which led to an overall 1.4% same-store sales increase between Nov. 1 and Dec. 31. Digital same store sales grew 19% in the November/December period, driven primarily by the company's same-day fulfillment services (Order Pick Up, Drive Up and Shipt), which together grew more than 50% from the comparable period last year. The company is maintaining its previous guidance for fourth-quarter earnings per share. It did warn, however, that same-store sales growth for the full quarter, which includes January, would likely come in at less than half of the 3% to 4% growth it had predicted earlier"...

NGA, ROFDA Suspend Planned Merger
SN: "The National Grocers Association (NGA) and Retailer Owned Food Distributors & Associates (ROFDA) have halted plans to merge... NGA declined to publicly release details on why the merger was being suspended... The organizations unveiled the merger in November. “In light of a number of unexpected circumstances, NGA and ROFDA have decided to pause the planned acquisition of ROFDA by NGA. While our two organizations continue to share a strong and collaborative relationship, it’s clear now is not the time to proceed as originally planned,” NGA President and CEO Greg Ferrara and ROFDA Chairman David Bullard said in a joint statement... Plans called for ROFDA to be integrated into the combined entity under the NGA umbrella. The merger had been approved by both boards and was expected to be completed Jan. 1. NGA plans to revisit the merger at its board meeting in February"...

Stop & Shop Reveals New Paid Parental Leave Benefits
PG: "The Stop & Shop Supermarket Co. is offering new parental leave benefits that will give qualifying full-time associates of any gender and gender identity six weeks of fully paid leave during the first 12 months after the birth, adoption or legal placement of a child. The new benefits, which went into effect Jan. 1, will be offered in addition to the grocer’s other time-off plans, which include paid time off and short-term disability... Stop & Shop sister banner Hannaford Supermarkets rolled out similar benefits last September. Other retailers to introduce parental leave assistance include Walmart and Dollar General. Stop & Shop employs more than 61,000 associates and operates 400-plus stores in Massachusetts, Connecticut, Rhode Island, New York and New Jersey"...

Kroger Delta Division, UFCW Ink New Agreement
PG: "The Kroger Co.’s Delta division and United Food and Commercial Workers Union (UFCW) Local 1529, based in Cordova, Tenn., have come to new labor agreement, according to a published report. The agreement covers more than 9,000 workers in west Tennessee, Mississippi, and northwest Arkansas, the Memphis Business Journal reported, adding that higher starting wages and periodic raises were included in it. Effective immediately, new full- and part-time employees now earn about $10 an hour, up from $7.65 and $7.35, respectively, with a yearly wage hike and health care benefits... The grocer has almost 6,200 full-time employees in the Memphis market, making the company the 10th largest employer in the area"...

Invisible Codes Added To Clothing For Bonus Info
MediaPost: At this week's NRF Big Show, in addition to its product tracking, Digimarc showed off tracking of clothing. "Their invisible codes can now be placed on shoeboxes, textiles and garments," writes Chuck Martin. "For example, the codes can be on the numbers on sports jerseys so owners can scan the jersey to get more information on their favorite players and teams. On shoeboxes, the codes can be used to authenticate the footwear, especially some of the bigger ticket items. The clothing becomes connected. Consumers now actually can wear the code."


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