This is issue no. 194. The last issue had a 45.17% open rate with an additional ⚡️ 7.32% of you going back to this article on Shopify going from strength to strength. Oh, just a relatively ignored tweet from November 2016 here.
The largest sites that make money from affiliate revenue — including, presumably, The Wirecutter — have contracts with Amazon that list custom affiliate revenue rates, and it’s unclear how those are affected. “We’re not going to comment on the specifics of these new affiliate rules,” a New York Times spokesperson told me. “But we remain confident in the Wirecutter business and Amazon remains an important partner to us.”
BRAND: In a couldn't-be-orchestrated-better turn of events, the New York-based brand has released its Spring 2017 men's underwear campaign featuring four actors from the film "Moonlight," which won Best Picture at Sunday's 89th Academy Awards in what was somewhat of a surprise upset. Buried lede: Rebekka Bay exits Everlane
ECOMMERCE: When digital advertising rates are falling and e-commerce is rising, affiliate revenue seems like a pretty attractive business model, and it’s one that many news outlets have been looking to for growth. Last fall, when The New York Times bought product review sites The Wirecutter and The Sweethome for a reported $30 million.
BRAND: “The Grateful Dead is one huge case study in contrarian marketing,” writes marketing and sales strategist David Meerman Scott, co-author of the book “Marketing Lessons from the Grateful Dead: What Every Business Can Learn from the Most Iconic Band in History.” “Most of the band’s many marketing innovations were based on doing the exact opposite of what other bands (and record labels) were doing at the time.
MEDIA: I have been a big fan of Monocle for years now, and as it turns 10 years old, it deserves a bigger place in the annals of successful media companies than it has been given credit by the media class that follow such things. Everything I have learned about media branding is in large part from Monocle, and its sensibility around its packaging, electicness, and contrarianism.
BRAND: The decision to run the ad during the Academy Awards was very deliberate, with a direct nod to those who wouldn't necessarily be found in the seats of the Hollywood theater that night. "The Oscars represent the pinnacle of celebrating filmmakers, making it the ideal backdrop showcase this spot and acknowledge the other incredible makers, creators and directors of this generation that may not have otherwise been celebrated," Mr. Coulter said.
ECOMMERCE: So how worried should grocers be? Well, one answer is not very much. The project is limited to four locations at this point, and it may not have the same store experience behind it that is at another more traditional grocery. Collect your online order from Wal-Mart or Kroger, and you can go into the store to buy anything else you might need. Amazon’s new format, in contrast, has no showroom floor — just a lot of storage space and a “retail room” where customers can wait on their orders.
RETAIL BLOODBATH: As Kohl's and Macy's close the doors at some of their namesake shops, they're also adding locations. When factoring in openings related to Kohl's small shops, its Off/Aisle bargain concept and its Fila outlets, the company added four net stores last year. That trend, some argue, will cause retail's biggest underlying problem — an imbalance of supply and demand — to persist.
ECOMMERCE: The JDA/PwC survey also seemed to indicate that many retailers have overcommitted themselves in the race to offer fast, inexpensive product delivery. Indeed, 62% said they plan to raise their minimum order amount for free shipping, indicating economic realities are edging their way into customer acquisition efforts.
BRAND: It turns out that both numbers are factual. UA’s number combines their direct to consumer sales with its wholesale revenues, while NPD only tracks total consumer sales. UA is not trying to fool the market with the higher number because the SEC demands the combined sales be reported.
OMNICHANNEL: The iconic 100-year-old luxury department store retailer is trying to turn technology innovation into a core value, according to Emmons. As Neiman Marcus attempts to recapture shopper interest and drive traffic back to its stores, reimagining the in-store experience is about one thing: the customer of the future.
DATA: Helio provides a way to effectively match-make the consumer ecosystem at scale. In a massive industry with messy, opaque and unstructured data, Helio makes brands visible on an intelligent map, to the advantage of entrepreneurs and all other industry participants seeking insight. Note: We do this all without breaking NDAs or disclosing confidentially shared information with other companies or investors without the company’s approval. Most of the information and insight is generated from algorithms independent of the data shared by companies).
ECOMMERCE: Target’s new strategy follows a game plan employed over the past year by Wal-Mart. The world’s largest retailer is spending as much as $6 billion to lower prices across its aisles, according to Wolfe Research analyst Scott Mushkin. Wal-Mart Chief Executive Officer Doug McMillon said last week that “customers are responding” to the reductions, after the company reported its highest quarterly same-store sales increase in more than four years.
Last Word: You're ahead of the curve
One of the longterm projects that I am working on is the improvement of archive searchability. Indexing old commentary and links is a heavy task and this is a one-person operation. That being said, one of the obvious trends that I've pointed out was the impending shift away from affiliate revenues by featuring Amazon links in articles.
So instead of wasting your time with further commentary, I'll explain why early 2PML readers were able to understand that the shift towards slimmer affiliate commissions was an inevitability:
Their European market faced similar affiliate payout "restructuring" in late 2015 / early 2016.
An earlier-linked report on Amazon indicated that in the last two years, the eCommerce company was being increasingly judged on profitability. Their stock price reflected the reality that innovation was no longer enough to continue growth. For every .1% improvement in gross margins, market cap inched higher. This wasn't always the case, as Amazon has been notorious for shunning short-term profitability for longterm innovation.
Amazon began hiring "editors" in early 2016, indicating that they were beginning to focus on establishing in-house publications that generate consumer demand. This would make some media groups expendable.
As user loyalty increased, so did data. Amazon's been excellent for buyers, not for shoppers. They've emphasized the importance of generating their own demand for this reason. Amazon wants to own full stack shopping, not just buying.
Facebook is incredibly profitable and they laid out the roadmap to achieving hyper growth over the last 12 quarters. They cut out media partners to increase profitability. And then Google did the same by highlighting their own products in their marketplace ads, removing the need for media buys and cooperation.
These points were discussed between issues 30 and 180 (I know, I know). The solution for many of the media groups who will be affected by these subtle changes is simple enough: a) begin investing in direct commerce and b) diversify coverage to authentically highlight the affiliate links that Amazon is currently incentivizing c) build direct relationships with preferred vendors and implement Skimlinks or Impact Radius as solutions. While these changes are the beginning, I do expect them to accelerate once Amazon begins to implement better in-house demand creation via new niche publications branded under Amazon or the WAPO umbrellas.
Smaller media or commerce startups can succeed by exploring how to cultivate sustainable consumer ecosystems.