Semichem

BACKGROUND
Before working with us in 2012, Semichem did not stock any magazines – but they could see the value in a carefully selected range positioned by till points for impulse purchasing.

TRIAL
We initiated a trial at 35 Semichem stores, with a sample selected to reflect the chain’s geography and various store profiles. Over the course of 6 months, we tested a magazine offer in these stores, helping us identify a few key issues:

• Display: The trial ran with floor-standing cardboard units, starting in August. Initial sales were encouraging, but with Christmas was approaching, the retail team wanted the floorspace back to stock gift sets and other seasonal items. Interrupting a magazine offer would not help build sales or create a smooth running administrative or delivery process, so we had to find an alternative display solution.
• Delivery charges: Although initial sales showed that a magazine offer could be profitable for Semichem, the delivery charge was too high for them to consider rolling out their offer to the full network of stores.
• Invoicing: The industry standard invoicing method can be complex, with returns credited against the next issue’s invoice, on a 90-day lead time. This placed significant pressure on their accounts team, while tying up cashflow for an extended period of time.

SOLUTIONS
First and foremost, we needed to find a viable option for the physical display space. We carried out a number of store visits to identify and explore new display options –and we found a great position on the till points, directly beneath their LCD displays. Working with our design partners, we developed one of our most efficient display systems yet – a bespoke design which turned dead space into a retail opportunity.

To ensure that the supply would be financially viable, we negotiated with the publishers on a costing structure that removed the delivery charge – as long as we were supplying magazines to more than 100 stores.

Finally, we removed the administrative headaches of industry invoicing methods by managing the process ourselves, balancing up credits and returns to deliver a simpler consolidated invoice.

TODAY
We have been working with Semichem for more than two years and now supply 8 different titles to 111 stores, helping them sell thousands of magazines every week. The display solution helped boost sales by around 140% compared to our original trial, and its counter-top location frees up the floorspace for seasonal offerings and other products.

With a more efficient invoicing system, inaccuracies have been weeded out, so they pay for what they sell – while the consolidated invoicing system reduces the administrative burden on their accounts department.