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Intelligence and insights Jonathan Nowell

Intelligence and insights Jonathan Nowell. What is significant about this information?. Agenda – Intelligence and insights. Nielsen BookScan and information in the book supply chain Data or intelligence? BookScan at work Growing Sales Supply chain efficiencies Conclusions.

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Intelligence and insights Jonathan Nowell

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  1. Intelligence and insights Jonathan Nowell

  2. What is significant about this information?

  3. Agenda – Intelligence and insights • Nielsen BookScan and information in the book supply chain • Data or intelligence? • BookScan at work • Growing Sales • Supply chain efficiencies • Conclusions

  4. Information and the book supply chain ISBN agency Editorial Identifying & describing books Nielsen BookData, Bowker, Ingram, B&T Book supply chain Nielsen BookScan Measuring & analysing book sales Finding books Ordering books Wholesalers, TeleOrdering Nielsen BookNet PubNet/Easy

  5. Intelligence and insights – data? • Data – information – intelligence • Intelligence improves decision-making on tactical and strategic levels • Key learning • Information in context – e.g. Publisher’s Lunch • Don’t publish by numbers – e.g. Vernon God Little, Strange Incident … • Employ analysts – e.g. Random, Harper … • Be ambitious – e.g. set high returns reduction targets

  6. BookScan – The context …POS data – ISBN, volume, time, price

  7. Agenda – Intelligence and insights • Growing Sales (the right promotional mix) • Harper Collins, Australia • Strategic (genre analysis) • Simon & Schuster, US • Supply Chain Efficiencies (Inventory and sales data) • Time Warner, UK

  8. Brian Murray, CEO at HC, Australia • How does Harper Collins, Australia use BookScan? • BookScan Data + HC analysis = Improved Decisions • 1 Planning Decisions • 2 Reprint Decisions • 3 Marketing and Publicity Decisions • and Who benefits?

  9. 1. Planning Decisions • Before BookScan • Decisions based on • own list of books, • own experiences, • warehouse shipments • Publisher’s retail knowledge and awareness limited • After BookScan • Decisions based on • broader market, • actual sell through, • rate of sale, • true backlist, • RRP and ASP, • sales by channel • Publisher’s retail knowledge and awareness improved

  10. Case Example: Planning for The Hours • BookScan data: • 7 film tie-ins from 4 publishers • Week by week sales, RRP, ASP • Analysis: • Weekly sales potential of 2000-6000 units in key week • A 2-4x increase in peak week • Sales continue for at least 3 months after film • Implications: • To achieve this velocity 15,000 had to be in the market • Needed to print 20,000 • Market only ordered 10,000 units on sub

  11. 2. Reprint decisions • Before BookScan • Decisions based on • warehouse shipments, • outstanding backorders, • “feel” of the market • Reprints dangerous financially; when Publishers did reprint it was usually too late and the • quantity was not optimal • After BookScan • Decisions based on • sell-through percentage, • unsold stock in market, • projected new orders, • forecasted retail sales, • sales strength by channel • Reprint frequently with confidence to maximise “hot” titles

  12. Case Example: Bride Stripped Bare 1) Initial Print 15k 2) Serial and Feature newspaper coverage 3) Sell Through = 50%; Reprint 10K 4) What more can we do?

  13. Case Example: Bride Stripped Bare • 4) What more can we do to drive this book? • What if we had another $30K to spend on marketing? • Can we get more publicity? • Do our booksellers have enough stock? • Do we have enough stock? • How long does it take to reprint? • How many could sell over the next 4 weeks? • HC Decision: Immediate author tour if we can book TV

  14. Case Example: Bride Stripped Bare 1) Confirm TV interview 2) Book 4 day author tour 3) Extend marketing effort 8 weeks 4) Sell Through = 60%; Reprint 15K

  15. Case Example: Bride Stripped Bare • Publicity impact = 4 times increase 2) Sell through 80%+ 3) Reprint 25K

  16. Case Example: Bride Stripped Bare 116K in print 65K sold through retail 25K unsold in retail 70% sell through Some stock outs

  17. 3.Marketing Decisions After BookScan It is still difficult, but possible to measure the effectiveness of some spends It is possible to predict sales increases within a range Publishers should re-focus spending on marketing efforts that lead to measurable sales increases for booksellers • Before BookScan • It’s impossible to measure the effectiveness of marketing spending • author tours, publicity • festivals • print advertising • TV advertising • radio • Publishers spend $25-$50M pa on marketing efforts

  18. Preliminary Analysis Author Tours  less effective, often too costly TV, Print, Radio Ads  usually too costly to make impact Newspaper Serial  less effective, timing an issue Talkshow TV, Radio  difficult, limited control but effective Newspaper feature  difficult, limited control but effective AW Weekly selection  difficult, limited control but effective Oprah  difficult, limited control but still works! Film Tie Ins  difficult, limited control but effective Bins, POS  to be determined

  19. Agenda – Intelligence and insights • Growing Sales (the right promotional mix) • Harper Collins, Australia • Strategic (genre analysis) • Simon & Schuster, US • Supply Chain Efficiencies (Inventory and sales data) • Time Warner, UK

  20. Agenda – Intelligence and insights • Growing Sales (the right promotional mix) • Harper Collins, Australia • Strategic (genre analysis) • Simon & Schuster, US • Supply Chain Efficiencies (Inventory and sales data) • Time Warner, UK

  21. Rebecca and The Big Read • Conclusions • build up a history of "similar" titles (e.g. HB Fiction Branded Author) to forecast the required inventory to sales ratios • Leading to better decisions on re-prints or promotions and better matching of inventory to demand. • Improved returns estimates (how much) stock is actually in the trade and is this increasing or decreasing

  22. Rebecca and The Big Read • Conclusions • Improve the inventory position prize or PR beneficiaries (Rebecca). Intelligent supply chain management "push" copies into the trade in the knowledge that returns are unlikely • Build in exception reporting. In the case of Rebecca the distribution and sales lines are running parallel and about 15% - you might build variance parameters of 10% and 25%

  23. Spotting the bestseller Catching the high flyer Managing the core stock Merchandising Growing sales Knowing market share Monitoring seasonality Reducing returns Negotiating currency New title subbing Planning Marketing Regional analysis Inventory management Store distribution Timely reprints Validation Cost reduction Genre sizing Product definition Author acquisition Agent negotiation Imprint acquisition Gap analysis Format selection Price point analysis Conclusion – if you are not using BookScan intelligence in the following areas…call us!

  24. David Young’s big wins … 1. Bye, bye bullshit - it's impossible for anyone in the industry be they agents, publishers or authors to inflate sales statistics. We know a great deal more about our industry as a result. 2. Rate of sale out of stores - previously we relied on anecdotal information and reprinted in reaction to orders placed rather than sell through. 3. Reliable bestseller lists that can be run at classification level

  25. The cost of returns to the trade • Every book returned costs both the retailer and the publisher • In 1998, the UK book trade part funded a project by KPMG to estimate the costs of returns to the Booktrade • Back in 1998, the conclusion arrived at was that for EVERY book returned it cost the… • RETAILER - £0.50 or $ 0.92 • PUBLISHER - £1.00 or $ 1.80 • TOTAL COST TO TRADE - £1.50 or $ 2.70 per book • Assuming that the costs within the USA are comparable, what do you think the paybacks would be for each 1% drop in the US returns rate?

  26. For every 1% drop in the US returns rate, the trade could bank… Publishers… $15.2 million Retailers… $7.5 million Total trade… $22.7million For a publisher with a 5% market share this is worth$0.75million For a retailer with a 5% market share this is worth$0.38million If the US could mirror the UK and drop returns by 7% over 5 years, it would be worth… $5.25 million a year to the bottom line for a medium (5% share) publisher $2.6 million a year to the bottom line for a medium (5% share) retailer AND THE WHOLE TRADE BENEFITS ! Cost of returnsbased on the volume sales picked up by BookScan USA during 2003

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