Post on 22-Oct-2014
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November, 2002
Market Basket Analysis of Magazine Purchasers in the Grocery Channel
Management Science Associates, Inc.
GROCERY CHANNEL MARKET BASKET ANALYSIS
AGENDA
I. Study Methodology
II. Who is the Magazine Newsstand Purchaser?
III. What is the value of the Magazine Newsstand Purchaser to the Retailer?
IV. What is the Shopping Behavior of the MagazineNewsstand Purchaser?
V. What is the Value of the Magazine NewsstandPurchaser to the Publisher and Advertiser?
VI. What are the Opportunities?
Copyright © 2002, MANAGEMENT SCIENCE ASSOCIATES, INC. BMH10/02
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Copyright © 2002, MANAGEMENT SCIENCE ASSOCIATES, INC. BMH10/02
Analyzed blind loyalty card data for over one million households and over 285 million purchase transactions
Covered a full year of purchases, September ‘01 through August ‘02
Involved ten stores at each of two mid-sized, regional grocery chains
Cleansed data to eliminate:
Shopping trips resulting in a purchase of under five dollars Negative purchase values Cards that showed over thirty-five scans in a one-week period Cards that did not show at least one shopping occasion during
the last three quarters of the study period
Market Basket Study Methodology
Copyright © 2002, MANAGEMENT SCIENCE ASSOCIATES, INC. BMH10/02
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Copyright © 2002, MANAGEMENT SCIENCE ASSOCIATES, INC. BMH10/02
Who is the MagazineNewsstand Purchaser?
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Copyright © 2002, MANAGEMENT SCIENCE ASSOCIATES, INC. BMH10/02
Age
8%
21%
26%23%
13%
8%9% 10%
14%
21%24%
21%
0%
5%
10%
15%
20%
25%
30%
18 - 24 25 - 35 36 - 45 46 - 55 56 - 65 66 - 75
Per
cen
t o
f H
ou
seh
old
s
Magazine Purchasers Non-Magazine Purchasers
Note: Data provided by one chain
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Copyright © 2002, MANAGEMENT SCIENCE ASSOCIATES, INC. BMH10/02
Education Level
Note: Data provided by one chain
5%
31% 30%
15%
20%
6%
34%
28%
14%18%
0%
5%
10%
15%
20%
25%
30%
35%
40%
Grade School HighSchool Some College 4-Yr College Post Graduate
Per
cen
t o
f H
ou
seh
old
s
Magazine Purchasers Non-Magazine Purchasers
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Copyright © 2002, MANAGEMENT SCIENCE ASSOCIATES, INC. BMH10/02
Education Level by Category
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
Auto Technology Tabloid
Per
cen
t o
f H
ou
seh
old
s
Jr HighHigh SchoolSome CollegeBachelors DegreeGraduate Degree
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Copyright © 2002, MANAGEMENT SCIENCE ASSOCIATES, INC. BMH10/02
Income Level
Note: Data provided by one chain
6%
28%
33%
22%
11%9%
32% 31%
18%
10%
0%
5%
10%
15%
20%
25%
30%
35%
< $20,000 $20,000-$39,999
$40,000-$59,999
$60,000-$79,999
$80,000+
Per
cen
t o
f H
ou
seh
old
s
Magazine Purchasers Non-Magazine Purchasers
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Copyright © 2002, MANAGEMENT SCIENCE ASSOCIATES, INC. BMH10/02
Household Size
Note: Data provided by one chain
20%22%
9%
3%1%
16%
35%
8%
3% 1%
31%
13%
19%19%
0%
5%
10%
15%
20%
25%
30%
35%
40%
One Two Three Four Five Six Seven +
Per
cen
t o
f H
ou
seh
old
s
Magazine Purchasers Non-Magazine Purchasers
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Copyright © 2002, MANAGEMENT SCIENCE ASSOCIATES, INC. BMH10/02
Household Size by Category
0%
5%
10%
15%
20%
25%
30%
35%
40%
Animals Kids/ Teens Tabloid
Per
cen
t o
f H
ou
seh
old
s
One Two Three Four Five Six +
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Copyright © 2002, MANAGEMENT SCIENCE ASSOCIATES, INC. BMH10/02
What is the Value of the Newsstand Purchaser to the Retailer?
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Significance of Magazine Purchasers
24%
58% 58%
76%
42% 42%
0%
10%
20%
30%
40%
50%
60%
70%
80%
% of Shoppers % of Total RetailGrocery Dollars
% of Total GroceryItems Purchased
Magazine Purchasers Non-Magazine Purchasers
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Copyright © 2002, MANAGEMENT SCIENCE ASSOCIATES, INC. BMH10/02
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32
21
0
5
10
15
20
25
30
35
Total MagazinePurchasers
Non-MagazinePurchasers
Annual Shopping Weeks
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Copyright © 2002, MANAGEMENT SCIENCE ASSOCIATES, INC. BMH10/02
$46
$67
$39
$0
$10
$20
$30
$40
$50
$60
$70
$80
Total MagazinePurchasers
Non-MagazinePurchasers
Average Dollars Spent Per Shopping Week
15
Copyright © 2002, MANAGEMENT SCIENCE ASSOCIATES, INC. BMH10/02
Average Number of Items PurchasedPer Shopping Week
20
29
17
0
5
10
15
20
25
30
35
Total MagazinePurchasers
Non-Magazine
Purchasers
Nu
mb
er
of
Ite
ms
16
Copyright © 2002, MANAGEMENT SCIENCE ASSOCIATES, INC. BMH10/02
Grocery Spending Definitions
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Copyright © 2002, MANAGEMENT SCIENCE ASSOCIATES, INC. BMH10/02
Percent of Households by GrocerySpending Level
53%
37%
10%
23%
41%36%
0%
10%
20%
30%
40%
50%
60%
High GrocerySpending
Medium GrocerySpending
Low GrocerySpending
Magazine Purchasers
Non-Magazine Purchasers
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Copyright © 2002, MANAGEMENT SCIENCE ASSOCIATES, INC. BMH10/02
What is the Shopping Behavior ofthe Magazine Newsstand Purchaser?
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Copyright © 2002, MANAGEMENT SCIENCE ASSOCIATES, INC. BMH10/02
Percent of Shoppers Within Each Business Line that are Magazine Purchasers
57%54% 52%
45% 44% 42% 41% 41%38%
34% 34% 33% 31% 28%25%
0%
10%
20%
30%
40%
50%
60%
PHARMACY
VIDEO
PHOTO
FLORAL
GREETING C
ARDS
SEAFOOD
PREPARED FOODS
GENERAL MERCHANDIS
E
TOBACCODELI
HBC
BAKERY
MEAT
PRODUCE
GROCERY
24% of Total Grocery Store Shoppers Purchase Magazines
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Copyright © 2002, MANAGEMENT SCIENCE ASSOCIATES, INC. BMH10/02
Coupon Usage Among Magazine Purchasers and Non-Magazine Purchasers
24%34%
140%
76%87%
66%
0%
20%
40%
60%
80%
100%
120%
140%
160%
Total Households Total Coupon UsingHouseholds
Total Coupon UsingHouseholds (Indexed)
Magazine Purchasers Non-Magazine Purchasers
Note:Data provided by one chain
21
Copyright © 2002, MANAGEMENT SCIENCE ASSOCIATES, INC. BMH10/02
Percent of Magazine Titles vs. Percent of Magazine Dollars by Category
0%
5%
10%
15%
20%
25%
30%
35% % of Total Magazine Titles
% of Total Magazine Dollars
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Copyright © 2002, MANAGEMENT SCIENCE ASSOCIATES, INC. BMH10/02
Average Yearly Magazine Spending By Purchase Frequency
$16.15
$5.35
$16.11
$25.82
$38.62
$55.13
$121.12
$0
$20
$40
$60
$80
$100
$120
$140
TOTAL 1 - 3 4 - 6 7 - 9 10 - 15 16 - 20 21+
Purchase Frequency
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Copyright © 2002, MANAGEMENT SCIENCE ASSOCIATES, INC. BMH10/02
Percent of Households vs. Percent of Dollarsby Purchase Frequency
68%
14%
6% 5%2%
5%
23%
14%9%
13%7%
35%
0%
10%
20%
30%
40%
50%
60%
70%
80%
1-3 4 - 6 7 - 9 10 - 15 16 - 20 21+
Purchase Frequency
% of Households % of Magazine Dollars
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Copyright © 2002, MANAGEMENT SCIENCE ASSOCIATES, INC. BMH10/02
Percent of Households by Purchase Frequency Within Each Magazine Category
HOME ENTER-
TOTAL WOMEN SPORTS BUSINESS KIDS COMPUTER TAINMEMT SCIENCE
MAGAZINES ANIMALS FAMILY AUTO FITNESS NEWS MISC TEENS ELECTRONICS FOOD MENS TRAVEL TECHNOLOGY TABLOIDS
TOTAL # 275,258 2,848 134,505 45,591 47,889 56,036 69,257 19,728 12,342 30,880 7,554 30,725 2,237 41,365
PURCH 1 - 3 68% 37% 54% 43% 48% 46% 47% 44% 43% 42% 45% 43% 36% 46%
PURCH 4 - 6 14% 18% 18% 18% 18% 19% 18% 19% 19% 18% 20% 18% 18% 17%
PURCH 7 - 9 6% 11% 9% 10% 10% 10% 10% 11% 11% 11% 10% 10% 11% 9%
PURCH 10 - 15 5% 11% 8% 11% 10% 10% 10% 11% 11% 11% 10% 11% 12% 9%
PURCH 16 - 20 2% 6% 3% 5% 4% 4% 4% 5% 5% 5% 5% 5% 6% 4%
PURCH 21+ 5% 17% 7% 13% 10% 11% 11% 11% 12% 13% 11% 14% 16% 14%
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Copyright © 2002, MANAGEMENT SCIENCE ASSOCIATES, INC. BMH10/02
HOME ENTER-
TOTAL WOMEN SPORTS BUSINESS KIDS COMPUTER TAINMEMT SCIENCE
MAGAZINES ANIMALS FAMILY AUTO FITNESS NEWS MISC TEENS ELECTRONICS FOOD MENS TRAVEL TECHNOLOGY TABLOIDS
TOTAL $ 4,444,881 18,943 1,341,173 287,025 395,085 500,009 521,850 129,420 126,718 274,995 47,749 290,376 18,740 492,797
PURCH 1 - 3 23% 27% 23% 23% 31% 22% 23% 28% 29% 23% 32% 22% 22% 11%
PURCH 4 - 6 14% 17% 15% 14% 17% 14% 14% 16% 18% 14% 19% 12% 14% 7%
PURCH 7 - 9 9% 10% 10% 10% 11% 9% 9% 11% 11% 11% 11% 9% 11% 6%
PURCH 10 - 15 13% 14% 14% 13% 13% 13% 12% 13% 14% 13% 13% 11% 14% 9%
PURCH 16 - 20 7% 7% 7% 7% 6% 7% 7% 7% 7% 7% 6% 7% 8% 5%
PURCH 21+ 35% 26% 31% 32% 21% 35% 35% 24% 22% 32% 19% 39% 31% 62%
Percent of Magazine Dollars by Purchase Frequency Within Each Magazine Category
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Copyright © 2002, MANAGEMENT SCIENCE ASSOCIATES, INC. BMH10/02
Percent of Magazine Dollars Spent by Month
0%
2%
4%
6%
8%
10%
12%
Sep-0
1
Oct-0
1
Nov-01
Dec-0
1
Jan-0
2
Feb-0
2
Mar
-02
Apr-02
May
-02
Jun-
02
Jul-0
2
Aug-02
Pe
rce
nt
of
Do
lla
rs
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Copyright © 2002, MANAGEMENT SCIENCE ASSOCIATES, INC. BMH10/02
Magazine Shopper’s Average Basket Expenditure by Number of Magazines in Basket
$45.14
$62.79
$81.96
$92.26
$73.65
$0
$10
$20
$30
$40
$50
$60
$70
$80
$90
$100
0 Magazines 1 Magazine 2 Magazines 3 Magazines 4+ Magazines
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Copyright © 2002, MANAGEMENT SCIENCE ASSOCIATES, INC. BMH10/02
Percent of Magazine Dollars by Purchase Frequency and Store Location
0%
20%
40%
60%
80%
Total 1-3 4-6 7-9 10-15 16-20 21+
Magazine Purchase Frequency
% o
f M
ag
azi
ne
Do
llars Main Line Front End
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Copyright © 2002, MANAGEMENT SCIENCE ASSOCIATES, INC. BMH10/02
Percent of Total Magazine Dollars by Grocery Spending Level and Store Location
33%
41%
11% 11%
2% 2%
0%
10%
20%
30%
40%
50%
Main Line Front End
High Grocery Spending
Medium Grocery Spending
Low Grocery Spending
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Copyright © 2002, MANAGEMENT SCIENCE ASSOCIATES, INC. BMH10/02
What is the Value of the Magazine Newsstand Purchaser to the Publisher and Advertiser?
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Copyright © 2002, MANAGEMENT SCIENCE ASSOCIATES, INC. BMH10/02
Percent of Households that Purchase Advertised Products
24%
44% 42% 38%
76%
56% 58% 62%
0%10%20%30%40%50%60%70%80%
TotalHouseholds
AdvertisedCookies
AdvertisedCrackers
AdvertisedCereal
Magazine Purchasers Non-Magazine Purchasers
32
Copyright © 2002, MANAGEMENT SCIENCE ASSOCIATES, INC. BMH10/02
Category Development Index for Advertised Products by Magazine Purchasers and Non-Purchasers
174%159%
74% 77% 81%
182%
0%
50%
100%
150%
200%
AdvertisedCookies
AdvertisedCrackers
Advertised Cereal
Magazine Purchasers Non-Magazine Purchasers
33
Copyright © 2002, MANAGEMENT SCIENCE ASSOCIATES, INC. BMH10/02
Propensity to Purchase by Business Line for Magazine Buyers within a Category
HOME ENTER-
WOMEN SPORTS BUSINESS KIDS COMP TAINMNT SCIENCE
ANIMALS FAMILY AUTO FITNESS NEWS MISC TEENS ELECT. FOOD MENS TRAVEL TECH TABLOIDS
BAKERY 106% 98% 100% 99% 103% 97% 103% 98% 104% 91% 104% 101% 99%
DELI 106% 99% 99% 101% 103% 96% 104% 97% 107% 92% 101% 100% 98%
ENTERTAINMENT 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100%
FLORAL 121% 93% 97% 107% 106% 89% 116% 93% 110% 85% 104% 105% 85%
GENERAL MERCHANDISE 115% 93% 99% 103% 103% 96% 106% 98% 102% 93% 101% 104% 90%
GREETING CARDS 118% 93% 99% 104% 105% 93% 109% 93% 108% 88% 106% 99% 92%
GROCERY 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100%
HBC 106% 98% 99% 103% 101% 98% 103% 99% 100% 100% 98% 102% 93%
MEAT 104% 99% 100% 101% 100% 99% 102% 99% 102% 97% 100% 100% 99%
PHARMACY 124% 97% 109% 103% 106% 92% 118% 92% 99% 77% 117% 109% 83%
PHOTO 135% 86% 97% 113% 109% 86% 136% 81% 104% 90% 104% 98% 81%
PREPARED FOODS 116% 94% 100% 103% 106% 90% 108% 97% 108% 90% 101% 104% 92%
PRODUCE 102% 100% 99% 100% 101% 99% 101% 99% 102% 97% 101% 100% 100%
SEAFOOD 118% 94% 98% 106% 103% 91% 108% 98% 118% 79% 100% 108% 87%
TELECOMMUNICATIONS 141% 77% 97% 121% 101% 96% 127% 91% 88% 108% 98% 104% 76%
TOBACCO 110% 90% 108% 103% 100% 106% 109% 94% 80% 138% 94% 85% 115%
VIDEO 135% 249% 37% 105% 103% 91% 136% 86% 97% 82% 118% 98% 85%
= above average = below average
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Copyright © 2002, MANAGEMENT SCIENCE ASSOCIATES, INC. BMH10/02
Average Number of Basket Items
35
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Average # of Items Purchased by Business Line When a Magazine is in the Basket
HOME ENTER-
TOTAL WOMEN SPORTS BUSINESS KIDS COMPUTER TAINMEMT SCIENCE
MAGAZINES ANIMALS FAMILY AUTO FITNESS NEWS MISC TEENS ELECTRONICS FOOD MENS TRAVEL TECHNOLOGY TABLOIDS
Overall 28.4 32.4 30.2 28.5 28.5 30.0 27.4 33.7 28.7 32.6 25.0 28.7 26.6 27.8
Pharmacy 1.8 2.0 1.8 1.8 1.7 1.7 1.8 1.6 1.7 1.7 1.8 1.7 1.8 1.9
Video 1.9 2.2 1.9 1.9 1.9 1.9 1.9 2.0 2.0 2.0 1.8 2.0 1.9 1.9
Photo 1.4 1.6 1.4 1.4 1.5 1.5 1.4 1.5 1.5 1.5 1.6 1.5 1.3 1.4
Floral 1.5 1.6 1.5 1.5 1.5 1.6 1.5 1.5 1.5 1.6 1.6 1.5 1.6 1.5
Gen Merch 2.2 2.5 2.3 2.2 2.3 2.4 2.2 2.6 2.4 2.5 2.2 2.3 2.3 2.2
Greeting Cards 2.2 2.3 2.3 2.1 2.2 2.4 2.2 2.4 2.3 2.4 2.1 2.3 2.3 2.2
Seafood 1.5 1.5 1.5 1.5 1.6 1.5 1.5 1.6 1.6 1.6 1.6 1.6 1.5 1.5
Prepared Foods 1.8 1.9 1.8 1.8 1.9 1.9 1.8 2.0 2.0 1.9 1.8 1.9 1.8 1.8
Tobacco 1.9 1.9 1.9 1.9 2.0 1.9 2.0 1.9 1.9 1.9 1.8 2.0 1.8 2.0
Deli 2.4 2.4 2.4 2.5 2.5 2.5 2.3 2.6 2.6 2.6 2.4 2.5 2.5 2.4
Bakery 2.9 3.1 2.9 2.9 2.9 3.0 2.9 3.2 3.1 2.9 2.6 3.0 3.0 3.0
HBC 3.0 3.4 3.1 2.9 3.3 3.2 2.9 3.7 3.1 3.1 3.3 3.0 3.1 2.8
Meat 3.2 3.5 3.2 3.2 3.4 3.2 3.2 3.7 3.7 3.2 3.5 3.4 3.3 3.2
Produce 5.5 5.8 5.7 5.7 5.8 5.8 5.1 6.0 5.5 6.6 5.3 5.1 5.2 5.0
Grocery 17.3 19.6 18.3 17.2 17.3 18.0 16.6 20.6 17.8 18.9 15.2 17.6 15.6 16.4
= above average = below average
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Copyright © 2002, MANAGEMENT SCIENCE ASSOCIATES, INC. BMH10/02
What are the Opportunities?
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Copyright © 2002, MANAGEMENT SCIENCE ASSOCIATES, INC. BMH10/02Copyright © 2002, MANAGEMENT SCIENCE ASSOCIATES, INC. BMH10/02
Opportunities
Broad-scale approach to better merchandising
Cross-merchandising between magazines and high-margin or high-ticket items
Magazine department located near high-margin departments and seasonal or impulse items
Placement of magazine racks within related grocery departments
38
Copyright © 2002, MANAGEMENT SCIENCE ASSOCIATES, INC. BMH10/02Copyright © 2002, MANAGEMENT SCIENCE ASSOCIATES, INC. BMH10/02
Opportunities
Business line product mix adjustments based on magazine sales or Magazine category adjustments based on business line sales
Multiple magazine purchase incentives managed through loyalty card program
Coupon effort or other trial or continuity promotional programs
On-product subscription premiums or copy offers with the purchase of advertised product