7.07.2006

The long tail of retail


I visited this magazine shop the other day called the Chicago-Main Newsstand. It looked like a newsstand. But it was not. It was a newsstand on steroids.

My boyfriend was planning a trip to the Big Apple, and he wanted a copy of Time Out New York. I was like, "Why would they sell a local magazine, which tells you about events happening in THAT city, in THIS city?" He was like, "Just you wait - they'll have it."

We step inside, and a tidal wave of magazines seems to be crashing down all around us. So. Many. Magazines. So many categories and subcategories. I counted 29 titles in the Aviation section alone. They had a pets section which, beyond just your standard cat, dog and bird publications, had one for people who raise alpacas! There were two copies of this magazine, leading me to believe there are at least two individuals in the greater Chicagoland area who have an interest in these llama-like mammals!

This store had the wide selection, the obscurity, the long tail, if you will. Stores with this type of niche product can usually survive because they have high margins - think super-posh maternity clothing boutiques like Belly Dance or super-quirky rare and beautiful toy stores like Rotofugi.

But on the other hand, magazines aren't high-margin. What do they cost, three bucks? The shop's proprietor can't be marking them up that much. How in the world is this guy still in business?

Well, if you don't have margins, you have to have sales. But selling lots and lots of cheap things is not a guarantor of success. You could never have a niche store like this survive if it were selling other cheap items, like gum or pens. How long would a pen store be in business? Well, how often do you buy pens?

Then it hit me. Magazines are of a time-based nature. New ones come out on a regular basis. For this guy to own real estate in Evanston, and to ever turn a profit, he must have customers who are using his store like a subscription. Coming in every day, week, month or quarter.

And still, I thought, this is the type of business that the internet will render obsolete. You can surely get all of these titles from magazines.com. But then I realized an even greater element of magazine shopping: it's all about browsing. You stand in there and scan. You pick up. You glance through. You read. People were standing around in this store, and by standing around I mean STANDING AROUND. They looked like they lived there! It's fun to go to a place like this, because no matter your interest, you will find an abundance of cool stuff to check out. And you can definitely get lost in there for hours if you want to.

Good luck, Chicago-Main Newsstand. Your business model is based on the nature of your product, and I'm glad to see you're holding out where others have failed.

Oh by the way - they had Time Out New York. And Time Out London.

5 comments:

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Anonymous said...

I wonder if the owner of the newsstand should encourage more browsing? Maybe there is an argument that says, the longer you stay the greater the chance you'll buy one or more titles?

Maybe most book/magazine stores, Border/Barnes and Noble are conflicted over encouraging more browsing or less browsing?

I say, make it more comfortable and and the shoppers will speak with their wallets.

april said...

i believe that the magazine publishers buy back the magazines that don't sell at the end of each month. that would help to keep them in the black.

sara said...

April, good point. I'm sure publishers hate doing that, but this is that weird part of the retail industry where product makers are held accountable for their own sales. It's indicative of the larger power shift from manufacturers to retailers.

Anonymous said...

You're right--publishers HATE doing that!!! ;)