This is issue no. 152 of 180. The last issue had a 👍🏾 46.21% open rate with 10.80% of you visiting this article the top five ways the eCommerce sites fail. Watch this video about an autonomous Otto semi-truck transporting Budweiser featuring a human driver reading a newspaper in the back while contemplating his next career. And online brand pop-ups, a new trend. And a worthwhile white paper on B2B eCommerce effectiveness.
ECOMMERCE: This study, conducted through ConversionXL Institute, is the first of a two-part series exploring security perceptions on checkout pages. We compare the effectiveness of six popular trust badges on an actual checkout page. Background This 2-part study looks at a similar issue as our previously published study on “trust symbol perceptions."
ECOMMERCE: Nordstrom, like other U.S. retailers, is waging a tough battle for customers with online retailers, which offer a more convenient shopping experience and also offer products at lower prices. U.S. retailers are keeping sales expectations and inventories low ahead of the holidays to avoid repeating last year's holiday quarter, when warm weather hit sales and left many goods unsold.
ECOMMERCE: Amazon currently claims about 6.6% of the market. That share is expected to increase to 8.2% by next year, and further expand to 16.2% within five years, according to Cowen analysts. By 2021, Cowen expects Amazon to generate $62 billion in annual apparel sales. TJ Maxx is expected to be the No. 2 clothing seller with $26 billion in sales and Macy's is expected to claim the No. 3 spot with $23 billion in sales.
ECOMMERCE: As consumers are increasingly shifting their spending habits online, the opportunity for sustained organic growth for online fashion retailers remains attractive. This wave is set to lay waste to brick-and-mortar shops unable to adapt to this monumental shift in consumer shopping behavior. It will usher in a new age, characterized by truly global online fashion companies.
ECOMMERCE: GGV Capital, an early backer of Poshmark, Alibaba and Airbnb, led the seed round in Lively. Gelmart International, the intimate apparel manufacturer, also invested, along with individual angels. GGV Capital Vice President Robin Li, now a board member at Lively, said one thing the firm liked about the lingerie startup was its ability to sell globally, from the start. The brand, in just six months, has racked up customers in dozens of countries, Li said.
ECOMMERCE: The Times is also looking to integrate Wirecutter recommendations with its current lifestyle coverage. The Times’ business news desk has worked with The Wirecutter in the past on guides to wi-fi routers and cord-cutting. The Food desk and the NYT Cooking app, in particular, are ready to collaborate with The Sweethome, which has extensively reviewed kitchen tools. French offered an example of how The Sweethome could work with NYT Cooking and the Food desk.
ECOMMERCE: Digital buyers in urban areas in Asia-Pacific are much more likely to use smartphones to make digital purchases than any other device, according to April 2016 polling. In Delhi, India, for example, nearly 100% of those surveyed said they bought via smartphone, while less than 20% had used a desktop or laptop.
RETAIL: With sales of shirts and shorts slowing in the U.S., Under Armour plans to focus on faster-growing businesses such as footwear and high fashion, while building out more retail stores, increasing its digital offerings, and entering new international markets. The only problem is, such big investments take money, which bite into the company's bottom line.
CORDCUTTING: Sling’s CEO said satellite firm Dish’s ownership of the streaming service has been instrumental in negotiating the right size and price for its bundle of channels. He argues that tech companies will have a tougher time getting there without the negotiating leverage of an affiliated traditional TV service.
ECOMMERCE: In a sense, ecommerce marketing is really about solving problems or meeting challenges. You open a new online store, but you don’t have many customers. That’s a problem. Or you have an established ecommerce shop but your average order value is low. That’s a problem. The scientific method starts with observing some phenomenon and asking questions about it.
Last Word: The Mainstreaming of editorial eCommerce
Or, how The New York Times can profit on The Wirecutter M&A in just a year. Affiliate commerce is nothing new but The Wirecutter's outsized influence is a wakeup call to media sites who've depended on ad revenue for the last ten years of the internet. The Wirecutter drove nearly $150M in eCommmerce sales, netting $15M in revenue for the small, independently owned company. To understand why the NYT acquired the property and its potential, you'd have to understand the basic eCommerce mechanics behind it.
Here are a few facts and figures: (source: SimilarWeb Pro)
TheWirecutter.com drove 116.16M visits to their site in the last year.
Amazon Links accounted for 59.26% of their outgoing traffic.
That's ~ 31,408,800 clicks to Amazon in the last year.
27.05% of all visitors clicked through to Amazon.com.
For every click to Amazon, The Wirecutter netted almost $.50 (that's like printing money just by ginning up visitors).
The typical Amazon margin falls between 5-15%.
Their top advertisers in the last six months: Microsoft, Dell, Nike.
The site's 10M+ visitors per month drives $150M in eCommerce revenue per year.
The New York Times is in an enviable position. Unlike many in media, they have quite the leverage when it comes to B2B eCommerce. Without bolstering Wirecutter's traffic at all, they have a nearly $135M delta to work with. That's the difference between (1) Amazon's top line revenue driven by The Wirecutter's influence and (2) the commissions that Wirecutter earned for that influence. The New York Times can leverage their relative power to innovate within the editorial eCommerce space. That toaster that the Wirecutter will choose as the top pick for Christmas 2016? Why not just source the products themselves? Cutting out Amazon.com, i.e. The Washington Post's benefactor. How so?
Easily integrate Amazon checkout at the cart, allowing customers to one-click pay for products no differently than they would had they done so through Amazon.com.
Source products directly from the vendor, cutting Amazon out as the middle man, while achieving margins far greater than 15%. Wholesale margins are up to 60% of MSRP.
Let's say that the NYT built a small team to source the products featured in upcoming product reviews. This small division could be worth $65-82M in annual revenue, generating a 210+% return on investment ($30M) in just a single year.
Just as important, though, is that lovely business model: The Wirecutter is still small, on pace to generate ~ $15 million in revenue this year, but that’s a number that could jump substantially with the sort of exposure the New York Times could provide, particularly when pairing The Wirecutter recommendations with regular New York Times content. Lam previously noted on The Recode Media podcast (that link is time-stamped to the relevant portion) that previous experiments with The New York Times along these lines resulted in some of the highest traffic the New York Times has seen — and, presumably, some of the best revenue The Wirecutter has seen as well. Now the New York Times will reap the benefits, as well as the chance to adapt The Wirecutter’s approach to even more verticals. Given that newspaper advertising revenue is plummeting, said growth will come not a moment too soon.
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