eCommerce continues to expand rapidly. It rose by 54% in the UK in July and accounted for 28% of sales, according to a recent GroupM report. “Growth was similar to the 55% pace of growth observed during the entire second quarter, suggesting that elevated levels of growth for eCommerce are likely to persist beyond the duration of the pandemic,” says Brian Wieser, Global President, Business Intelligence, GroupM.
In the US, eCommerce rose by 47% on a comparable basis to data tracked in the UK. This was significantly ahead of the 15% growth rate observed during the first quarter.
“A decade in eight weeks”
This remarkable growth has benefited publishers that sell or facilitate the sale of products or services online. For example, Hearst UK’s eCommerce revenue grew 322% during the second quarter this year, according to Digiday. New York Magazine’s shopping site, The Strategist, saw an 85% year-over-year increase in revenue during the second quarter. Marie Claire’s eCommerce revenue in the first seven months of 2020 was equal to what it generated for the entire 2019.
According to NYU Professor Scott Galloway, a decade’s worth of retail sales across the industry was made on US digital channels in eight weeks. “The percentage of retail done on digital channels has gone up one percent each year. And as of 2020 it was at 18%, and then in eight weeks it went to 28%! We had a decade in eight weeks,” said Galloway at the Lions Live event in June.
E-commerce, during the current global pandemic, has surged in 3-4 months to a level that was not expected for 3-4 years, said Damian Radcliffe, Professor at the University of Oregon’s School of Journalism, at the Asian Media Leaders eSummit 2020. “COVID-19 has emphasized that revenue diversification is more important than ever,” he added.
“eCommerce grew by 15% in the United States in 2018, representing a $517.36B market, and with global web sales in 2019 nearing $3.46T, up 18% year-on-year, this is clearly too big a space for publishers to ignore,” Radcliffe had written earlier this year on WNiP.
“Helping readers find what they need”
Traditionally, publishers’ have earned commerce revenues via affiliate partnerships and branded content. However, positive reader response and growing revenues in recent years have encouraged them to get more deeply invested in it.
Many have been experimenting with new strategies that broaden the scope of their eCommerce business. Hearst UK began diversifying into affiliate and eCommerce revenue lines in 2017 and is now counted among the most successful publishers there. It began offering product sampling as part of eCommerce-led ad campaigns from December. These have become more popular with beauty brands as stores have been closed during the pandemic, according to Digiday Reporter, Lucinda Southern.
“When you have a shop front where people can’t purchase, consumers become even more reliant on trusted sources. You don’t have the same face-to-face interactions with people behind the counter,” said Jane Wolfson, Chief Commercial Officer, Hearst UK. “More beauty clients are coming to us for help.”
Earlier, the publisher has also worked at creating its own products (a yoga mat). It plans to continue experimenting with other new ideas – in October it’s going to run a campaign which would allow people to trial lipstick color using augmented reality.
The key to success in commerce is to leverage your editors and focus on your audience, and “lean into what works,” said Betsy Fast, Chief Content Development Officer, Hearst, in a recent publishers’ round table organized by WNiP. Provide services your readers need or enjoy, and find other ways to “help them get on with their daily life in a really tough time,” she added.
Hearst’s purpose is to get more out of life. From mid-March that really became our MO: Helping readers find what they need and couldn’t get before, help them pass the time, help them with life spent at home.Betsy Fast, Chief Content Development Officer, Hearst UK
“Leaning into our digital advantages”
BuzzFeed, the other publisher that has been very active with its commerce projects, has taken the leap from earning affiliated revenues via product recommendations and reviews, to getting readers to shop on its website.
The publisher generated $300M in product sales last year. It is now aiming to create a sustainable revenue stream by building its own eCommerce platform and reduce reliance on affiliates. The strategy will also help BuzzFeed develop a more direct relationship with shoppers.
Creating our own eCommerce platform gives us the opportunity to own the entire user journey and create an even deeper, more direct relationship with our readers.Nilla Ali, Senior VP of Commerce, BuzzFeed
“Commerce has always been an important growth driver for BuzzFeed,” adds Ali. “What we’ve seen through the ongoing pandemic is the benefit of diversifying our commerce capabilities in the same way we’ve diversified our business model, and the power of leaning into our digital advantages as consumers increasingly shift to online shopping.”
“Test as many things as you can right now”
She encourages publishers to experiment with eCommerce. “More people are shopping online, conversion is higher and we’re getting better at anticipating consumer demand because it’s happening in real time,” Ali said in a Digiday+ Talk.
If you have not had a commerce business in the past or you haven’t doubled down on it, now is the time to do so.Nilla Ali, Senior VP of Commerce, BuzzFeed
“Test as many things as you can right now because the influx of people shopping online means the signal we can get in real time is much faster,” she suggested. “It is a time to be risky and get as many learnings under your belt as possible and make money while you’re doing it.”