We received a tweet last night which posed the following question:
Just what IS the @mag_nation business model? Nobody is buying anything – they’re sitting in comfortable chairs reading for free. Thanks, tho
We get this question all the time. Why do we let people browse and sit around reading magazines? People are appreciative of the fact that we allow it, but many wonder if it is good business sense. Those of you who know us well will know that we do more than just “allow” it. We actively encourage it and are known for it. Our motto, written up in our stores says:
Everything in this store can be touched, felt and browsed… except for our staff.
Are we a bunch of nice but misguided idiots or cunningly smart? I think we are a blend – nice and smart, as opposed to the other blend of misguided and cunning! Here is our logic.
First, let me confide to you that most of the retail experts we spoke to before we launched our business thought we were crazy. Newsagents have been around forever and the “we are not a library” mentality is well known. The traditional thinking is that this approach leads to a higher conversion rate. In other words, a greater percentage of people entering your store are likely to purchase.
Let me ask you – would you ever purchase a pair of jeans without trying them on? The answer for most people is no. So why should it be any different for a magazine? Most retailers know that encouraging customers to pick up, touch and interact with their products increase the likelihood of their purchase. But many of you will point out that a magazine is not a pair of jeans. A magazine can be consumed in-store which supposedly means it won’t get purchased.
We know our conversion rate, and it is lower than that of the standard newsagent. That said, we are not really comparing apples with apples. People go into newsagents for newspapers and lotto which pushes up their conversion rate. There is no other magazine only type retailer, which makes comparisons difficult.
Here is how we think about our business. For every 100 people who walk past our doors, a certain percentage enter our store. This is our entry rate. For every 100 who enter, a certain percentage buy something. This is our conversion rate. Does our conversion rate suffer because of our browse policy? Of course it does. Lots of people come in and don’t buy from us. However, our entry rate is significantly higher as a result. It is one of our points of difference. Our no pressure approach is what defines us. It makes us a destination. This means more people come in and they come in more often. We might have fewer people as a percentage buying off us, but the total number is higher because more people come in. To the person who tweeted us, this is our business model.
Also, our retailing philosophy encourages our customers to pick up different mags that they might not have seen before. The try factor at mag nation is much higher than other stores. It exposes you to new mags, many of which are niche and collectable. While some of the mainstream magazines can be consumed in one setting, so many of the mags we sell are titles that people want to take away with them. Our model is biased towards these types of magazines.
So, this is the “smart” behind what we are trying to do, or at least we think so anyway. Ultimately however, we simply tried to create a place that we would love to hang out in. If you enjoy your experience with us, you hopefully tell others about it. Not many other magazine retailers get spoken about in this way.