|
Getting your Trinity Audio player ready...
|
“Success is not linear it’s a journey and learning process,” says Emily Ferguson, Ecommerce Director at Marie Claire UK and Marie Clair Edit, reflecting on a key takeaway from a talk by one of her heroes, Natalie Massenet, the founder of Net-A-Porter and former Chairman of the British Fashion Council.
For publishers, that not only means being willing to do things differently, but also knowing when to walk away; and indeed when – and where – to hedge your eCommerce bets.
As we will see from these examples from Marie Claire UK, Buzzfeed, Conde Nast, F+W Media and POPSUGAR, there’s much to be learned from others in terms of testing ideas and modifying concepts, dropping eCommerce propositions that do not work or scale, and taking care to avoid the risks associated with in-house fulfilment and overexpansion.
Marie Claire Edit + Proof of Concept
Marie Claire UK launched their online fashion aggregator platform Marie Claire Edit in November 2018. With the tagline ‘Shop the brands you love. Fashion Editor approved’, Marie Claire Edit offered point of purchase, approval badges from Marie Claire Editors and the ability to shop from designer and high street brands like Selfridges, ASOS, Topshop and NET-A-PORTER.
A key goal at launch was to demonstrate proof of concept.
One potential reason for this, as Retail Dive contended, was a potential “muddying the waters between a magazine’s editorial mission and its revenue interests.”
“Even now, it may test the limits of how much content consumers will patiently read when they are on a mission to shop,” they added. “Although, separating Marie Claire Edit from the core magazine site may mitigate concerns about sales links overloading editorial content or too much content getting in the way of sales efforts.”
Less than a year later, in August 2019, an enhanced version of the site was released, featuring new navigation and shoppable editorial content which is updated daily. The initial “proof of concept” site had delivered an average 6% conversion rate, and an average basket size of £397 pounds ($478).
“We launched the site last year with only a few core elements to prove concept, and fundamentally understand our users,” said Emily Ferguson, Head of Fashion Affiliates. “Since then, the team has spent months testing how the site interacts with Google and what elements of the platform should be developed to further enhance its potential.”
BuzzFeed’s early forays into eCommerce
Other publishers have also demonstrated flexibility, a willingness to learn, and the ability to listen to their audience, when it comes to developing their eCommerce propositions.
Interestingly, as well as expanding their successful Tasty portfolio, BuzzFeed has also abandoned many of its earlier (more quirky and less scalable) efforts, despite these moves garnering considerable media attention.
Currently mothballed products include the Fuck Shit Shop, described back in 2016, as “BuzzFeed’s new spot for the sweariest shit you didn’t know you needed,” and the Fondoodler, a “hot glue gun” – “but for cheese.”
“Our content drives real world transactions,” BuzzFeed’s CEO Jonah Peretti recently said, and it’s clear that the lessons from Tasty will shape the company’s continued forays into eCommerce.
“Look at all the ways that business [Tasty] is generating revenue.” wrote last year. “With nearly 100 million fans, it is the biggest media brand on Facebook,” he said, “but almost all of its revenue comes from businesses we’ve needed to create on our own.”
More widely, “last year, BuzzFeed drove more than $425M in directly attributable transactions,” Peretti has revealed, “and this year will be much bigger. In a world of infinite and overwhelming choice, we are the switchboard for culture, news, and commerce.”
From monthly to quarterly: POPSUGAR Must Have
The San Francisco based publisher POPSUGAR has modified POPSUGAR Must Have, their quarterly subscription box which features fashion, beauty, home products, at a cost of $75 (or $270 for the year).
At one point, customers could purchase a monthly box for $39.95, as well as one-off “Limited Edition” boxes distributed across the year. However, in 2018, they scaled this back, switching to a quarterly product.
Announcing the move, Lisa Sugar, Founder & President, POPSUGAR said that the decision was “as a result of customer feedback” a rationale reinforced in their online FAQ:
“…We’ve received feedback from customers that, while they love their surprise box every month, they can sometimes get overwhelmed by the sheer number of products…. So we listened! Moving ahead, we will slow the pace of delivery and will pack each box with more high-end luxurious treasures.”
More than half (54%) of online shoppers in the United States say they use a subscription service, according to a 2019 survey conducted by Clutch, a ratings and reviews platform.
That said, although popular with millennials, “the longevity of the model’s success remains to be seen,” Retail Dive notes, citing a 2018 McKinsey study which found that 40% of those subscribing to subscription boxes ultimately cancel their services.
To avoid this fate befalling them publishers like POPSUGAR will need to continue to listen to their audience, and potentially tweak their products, if these eCommerce propositions are to remain viable in the long-term.
F+W Media’s eCommerce failings
In contrast to these efforts, the failure of F+W Media, the former publisher of Writer’s Digest, Antique Trader, Gun Digest, Popular Woodworking and other magazines, offers a cautionary eCommerce tale from which other publishers should learn.
The company went bankrupt at the start of 2019, citing a poorly executed eCommerce strategy as a key cause. F+W’s management had previously moved into eCommerce, believing it to be “a natural extension of its existing business lines.”
Initially, all seemed well. Folio reported in 2011 that the company would soon be opening its twenty-fifth eCommerce store and that eCommerce revenues were up more than 50 percent, as a result of processing between 12,000 to 15,000 transactions from online shoppers every month.
“In 2014, former CEO David Nussbaum doubled down on the space,” Adweek recounts, “announcing a new name—F+W, a Content + Ecommerce Company—and announcing that F+W was “strategically moving away from our traditional roots in the media business” to focus on “its fastest-growing businesses, digital and ecommerce.” “This was, it turned out, not to be a good bet.”
“There’s nothing like bankruptcy for exposing the flaws in a strategy that once looked credible,” notes Colin Morrison, a former journalist and CEO of media and entertainment companies such as EMAP, Australian Consolidated Press, Axel Springer, Future, Reed Elsevier, and Hearst. “It is now clear that F+W under-estimated the cost and complexity of its e-commerce.”
Although their eCommerce activity was generating a healthy profit margin and revenues of $60 million in 2014, within five years it was identified as a primary cause of F+W’s demise.
F+W lost 36% of its subscribers during 2015-18, while advertising revenue fell by 30%. Previously profitable eCommerce was, by the end of the decade, running at a loss.
“The company’s decision to focus on e-commerce and de-emphasize print and digital publishing accelerated the decline of the company’s publishing business,” CEO Greg Osberg wrote in documents submitted to a Delaware bankruptcy court, “and the resources spent on technology hurt the company’s viability because the technology was flawed and customers often had issues with the websites.”
“As the company began online sales of art, craft and writing supplies, it invested heavily in merchandise, the warehousing to store it, and the tech to manage the whole process,” Colin Morrison relates.
“F+W never had the expertise or technology to match its ambitions to become a full-service online retailer and this, ultimately, wrecked its relationships with pre-existing print customers.”
Lessons learned at Condé Nast
F+W Media’s experience highlights that even in cases where eCommerce is a good strategic fit for publishers, it’s not a panacea and that on-going success is not guaranteed.
Overexpansion, poor execution, and an inability to change track, can ultimately derail eCommerce efforts.
However, being able to spot these warning signs at an earlier point can potentially enable publishers to have a second bite at the cherry.
Condé Nast, for example, sought to parlay eCommerce into a revamped Style.com in 2016, before pulling the plug less than a year later.
“It marks the end of a very short chapter for Condé Nast,” Drapers the 130 year-old Fashion Business publication wrote, “in which the publisher of Vogue, GQ and Vanity Fair sought to diversify its revenue sources in the face of declining print advertising spend.”
That’s a financial backdrop that many publishers will be able to empathise with.
“Style.com, originally the home of all Condé Nast’s catwalk coverage, relaunched as an ecommerce site in September 2016 after a year of delays, but it failed to make an impression on consumers.”
In 2019, the company plunged back into the eCommerce with the launch of VogueWorld, “a distinct digital sub-brand combining the title’s celebrity and street style content with e-commerce.” Harnessing affiliate links and relations with retailers, Glossy notes that:
“While Condé Nast would not break out projections for VogueWorld, specifically, it said company-wide, it expects to grow e-commerce revenue by 300 percent in 2019.”
What these examples demonstrate is the need for agility in the eCommerce space.
From starting small, to a willingness to modify – including walking away from – products, publishers must consider the scale of their eCommerce ambitions, whether they have the skills and knowledge in place to deliver them, and the extent to which they should partner on initiatives or try to deliver the end-to-end proposition themselves.
In doing this, there are a number of cautionary tales, as well as success stories, both of which offer valuable clues and insights that publishers should pay heed to.
This article has been adapted, updated, and expanded from our free to download report, The Publisher’s Guide to eCommerce.
