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Article 7Sales of magazines have long been fueled by bored shoppers waiting in the checkout line who get engrossed in an article and then feel obligated to purchase the magazine.  Now, customers are more likely to send a text or check Facebook than to read a magazine or suddenly feel compelled to purchase gum or candy at the checkout aisle.  Many companies, like Hearst Corp., who publishes magazines like Cosmopolitan, Seventeen, and Esquire, and Coca-Cola Co. are reconsidering how to showcase their products so customers start to take notice again.

In the second half of 2012, single-copy sales of U.S. consumer magazines fell 8.2 percent, and publishers are attributing part of this decrease to the increase in Americans who now carry smartphones.  The gum category is also experiencing a loss with a 5.5% decline in sales in the last year.

Now, manufacturers are partnering with retailers to develop new and creative ways to “catch customers by surprise!”  For example, in 1,500 Kroger stores, customers may stumble on a temporary cardboard display that offers a $3 discount on a six pack of Diet Coke and a Cosmopolitan magazine.  CVS Caremark Corp. and Target Corp will run similar product campaigns as Hearst is launching 20 in-store campaigns with companies like Coca-Cola and L’Oreal.  Last year, Harris Teeter stores showcased unique displays with Food Network magazines and bottles of wine.  Magazine sales in those stores rose 50%.  Companies are also looking to use mobile to help boost sales.  Hearst is teaming with media companies to offer consumers in-store prizes.  For example, consumers can text “Cosmo” to win prizes or earn on-the-spot coupons.

Not all stores are suffering from mobile blinders, it is mostly occurring with retailers that rely heavily on impulse purchases.  Other publishers are also suspecting that it’s not just mobile blinders that are causing the problems; it could also be higher taxes, commodity prices and gasoline prices.

Discussion Questions:

1. What are mobile blinders?

2. What are retailers and manufacturers doing about the problem?


SOURCE: Olga Kharif, Business Week, March 21, 2013