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The Great Paper Chase

From Baghdad to Broadway, the way news is viewed and delivered has changed. Mouse clicks have replaced page turning. Broadcast media has also flourished in the last decade due to the growth of cable and satellite services. At the end of most broadcasts, the new tagline is: For more information on this story, and others, please visit our Web site.

Today the challenge isn't in getting the news, but in choosing the vehicle, and this has affected the practice and pleasure of reading the newspaper, ink stains and all. Or has it?

With easily accessible news at everyone's fingertips, including e-mail news updates, it would appear that the oldest news vehicle is fading. One indication is that newspaper subscriptions have dipped for many national, regional and local papers. On the other hand, reports show that single-copy sales are equal to pre-Internet sales statistics, and, in some cases, on the rise.

The Numbers Don't Lie

According to a "Creating a Winning Relationship to Increase Single-Copy Sales," a survey conducted this year by the Newspaper Association of America (NAA), 84 percent of Sunday single-copy newspaper buyers at c-stores purchase three to four editions each month, and half of weekday buyers purchase a paper every day. "Newspapers are a means of attracting a high volume of repeat customers for convenience stores," said John Murray, vice president of circulation marketing for the NAA.

"There has been a shift from home delivery of newspapers," he added. "The trend lines on newspapers are single-copy sales."

NAA statistics also concluded that 50 percent of daily newspaper home-delivery subscribers are at least 50 years old. In addition, four in 10 people in the 18-to-34 and 35-to-54 age groups are both daily and Sunday single-copy buyers. "The convenience store is the No. 1 sales channel. Our battle is to build frequency and maintain it," said Murray.

The survey also concluded that 42 percent of buyers purchase the paper on their way to work, 10 percent buy it on their way home from work and 7 percent buy it on their break from work. Perhaps the most interesting

statistic is that nine out of 10 convenience store shoppers surveyed said they usually buy the paper at a c-store, and more than three-fourths said they nearly always buy from the same location.

That increase in single-copy sales has been a boon to the newspaper industry. According to preliminary results from the NAA, total newspaper advertising expenditures rose 4.1 percent for the second quarter of 2004 to $11.5 billion vs. the same period last year.

The Good News: Coffee and Snacks

Getting customers through the door is the goal, but the bait is not as important as what occurs after the hook is in. The NAA found that 58 percent of shoppers who buy a paper in a c-store also make additional purchases, averaging $4.68 per week. On Sundays, 44 percent of newspaper buyers make additional purchases, adding another $6.20 to the till.

While the amount of profit made on a newspaper is roughly 20 percent of the cost, the real benefits are associated sales and impulse buys. Among the participants in NAA's survey were 7-Eleven Inc. and Krause Gentle Corp., which operates Kum & Go convenience stores. Both of these operators realize the significance of the single-copy sale demographic.

"We view our newsstand offerings as another convenience item. The combination of coffee, our fresh breakfast food offerings and a newspaper is a natural one for our customer," said Tom Gerrity, product director of the non-foods division for Dallas-based 7-Eleven Inc., which operates approximately 5,700 stores in North America. "While I can't break out specific percentage of newspaper sales, I can tell you that in 2003, the non-foods category, which includes newspapers, made up 7 percent of total sales."

The NAA also found that weekday newspapers are purchased most often by young males (18 to 34), which is the toughest demographic to reach, typically, while Sunday newspapers attract women, who control the majority of all household spending.

Media outlets that offer an online version of their newspaper may seem like a loss leader, but Murray said it has had the opposite effect. "Newspapers that have good Web sites usually have readers that do not abandon the newspaper because these are people that are news-hungry," he said, conceding that alternative news offerings "remain an issue for us."

While Web sites and cable television have affected newpaper subscriber rates, the main problem is how the average American defines his or her down time. "There are so many alternative and competing forms of media and the frequency of readership is down," said Murray. "There has been a shift in lifestyle trends and how people spend their time. It used to be that people would set aside time to read the newspaper on the weekend but people have too much to do, and what we hear most is 'I don't have the time to read.'"

Partnerships = Progress

With statistics supporting single-copy sales, c-stores and newspaper publishers across the country have turned to in-store promotions, and the results have been positive.

For example, Hampton, Iowa-based Krause Gentle Corp., which operates 340 Kum & Go stores in 13 states, partnered this year with The Des Moines Register to increase newspaper sales and overall traffic to its stores. In January, Kum & Go initiated a six-week promotion that entitled customers purchasing gasoline to a free copy of the newspaper. Kum & Go managers worked with sales representatives from the Register to improve point-of-purchase sales, which included displaying the paper on the counter as well as on the newsstand. The first campaign, which ran into the second week of February, doubled previous newspaper sales. Daily sales increased by 3,292 copies, and Sunday sales increased by 4,619.

"Our daily newspaper sales increased an overwhelming 250 percent and established our convenience store chain as the destination stop for daily readers of The Des Moines Register throughout the state of Iowa," said Bill Krause, CEO of Krause Gentle. "No matter whether it's a marriage or it's a business, partnerships are all about mutual trust, and the desire to do more and better. At our company, we always say one thing: 'I would rather have one customer a thousand times, than a thousand customers one time.'"

While Kum & Go and the Register always enjoyed a progressive relationship, this campaign was just one of many partnerships. Over the past 18 months, Kum & Go contributed more than $15,000 to the newspaper's nonprofit Newspaper in Education Program. In addition, Kum & Go provided 150,000 special edition copies of the Sept. 11 commemorative issue for delivery to Iowa students in 2002. In appreciation, the Register ran a full-page advertisement to recognize the company's effort, which was well received, said Murray.

Kum & Go isn't the only c-store chain benefiting from a partnership. "Traffic-driving promotions that tie newspapers to other items in the store work well," said Gerrity. 7-Eleven recently announced a partnership with USA Today. On Sept. 7, when the newsstand price of USA Today increased from 50 cents to 75 cents, 7-Eleven had an exclusive consumer offer with the newspaper that offered customers purchasing any size 7-Eleven coffee a copy of USA Today for 50 cents. The partnership will end Nov. 7, but is aimed at maintaining USA Today's sales, while increasing traffic to 7-Eleven stores. "Since our coffee customer demographic closely matches the USA Today customer demographic, we're very excited to deliver this exclusive offer to our customers," said Gerrity. "We think it will help to build both customer trial and long-term loyalty to our brand."

Capitalizing on single-copy sales is the wave of the future, and c-stores are on the front line. The amount of business generated by newspapers is on the rise, which is supported by increased advertisement revenues and more partnerships. The importance of redesigning a store's layout, including the newspaper racks, counter displays and coffee bars, is crucial. Each customer should have more than one opportunity to get snagged by a catchy headline.

"You have to use the newspaper to direct traffic for impulse sales," said Murray. "The newspaper must be very visible so a customer can make the decision before the wallet goes back in the pocket."
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