Issue no. 243. The last one had a 😔 38.89% open rate with 7.2% of you reading up how BuzzFeed became one of the few publishers to master in-house eCommerce. Aerosoles is the latest casualty in the retail apocalypse. Mizzen+Main sponsored the Harvard vs. Yale Polo Match (via Town and Country).
Did a colleague forward this letter to you? Thank them and subscribe here.
Alibaba has stepped up its focus on fashion in recent months launching a Luxury Mall section on Tmall. It followed moves by rival e-commerce giant JD.com, which formed a partnership with Farfetch.com and launched a luxury delivery service. While Alibaba remains the dominant player in China's e-commerce market, JD.com has begun to catch up and steal market share.
eCommerce: At one point in 2015, ShopBazaar, Harper’s Bazaar’s e-commerce platform, had a network of 150 retail partners, including department stores like Saks Fifth Avenue and the e-commerce retailer Yoox. The idea was to make as much of the magazine shoppable as possible, said Katie Hobbs, ShopBazaar’s executive e-commerce director, with a goal to scale the site to the size of a full-blown luxury marketplace.
Media: The first article published about Bodega read almost like a Silicon Valley parody. It highlights a few things people feel is wrong with the tech community right now; Bodega comes across as a tone-deaf company that got the thumbs-up from some of the Valley’s most respected investors for a seemingly absurd idea with a culturally insensitive name. It represents a confounding and out-of-touch approach to disruption; if you missed the headline, it’s “Two Ex-Googlers Want To Make Bodegas And Mom-And-Pop Corner Stores Obsolete.”
Voice Commerce: The number of Alexa-powered devices at this year's Consumer Electronics Show was a testament to how quickly voice commerce is changing. Guests to the event were treated to an LG smart refrigerator that used Alexa to order food items. Car giants Ford and Volkswagen had the AI integrated into their vehicles, allowing drivers to do some voice shopping while driving. Alexa was also built into Dish consoles so that users can utilize their voice to look for their favorite channels, search for good shows, and to shop.
Media: Historically, Snap has tried to maintain a strict distinction between editorial and branded content on Snapchat. Its preference was for brands to buy into Snap through products such as Snap Ads, geofilters and lenses. With this new role, Snap is saying it’s more willing to invite brands into one of its premium content offerings: Snapchat shows.
Brand: That won’t come as a campaign. “You have to show it,” Saint John, formerly the head of global consumer marketing for Apple Music and iTunes, said. “I don’t think you can in an ad.” To Saint John, building a new brand image has to happen in the background through human resources, changing company culture and hiring women and people of color.
Media: CAA has signed humor and meme site theCHIVE, Billboard and The Hollywood Reporter have exclusively learned. The multifaceted digital entertainment brand describes itself as "probably the best site in the world" on its home page and sees more than 30 million users per month and 800 million-plus content views monthly.
Data: Stephen Stanley, chief economist at Amherst Pierpont, also pointed to Amazon. He said details of July sales show that the sub category of internet shopping was up 2 percent, and probably the result of Amazon's self-proclaimed one-day shopping holiday. Amazon has said its third annual Prime Day was its "biggest day ever," with sales surpassing its 2016 Black Friday and Cyber Monday results. Prime Day sales grew by more than 60 percent from 2016.
eCommerce: When Amazon.com Inc. announced it had agreed to buy Whole Foods Market Inc., the news landed like a bomb in the grocery industry. Shares of companies such as Target Corp. and Supervalu Inc. were whacked, and startups like Blue Apron Holdings Inc. faced fresh questions about how they could get traction given this change in the competitive landscape.
Retail: How did we get to the point that space is more important than stuff? By August 2017, UBS counted the shuttering of 6,300 stores in the United States. Given that the retail apocalypse is probably upon us, physical stores need to fulfill a different purpose for companies. Rather than providing a space for the monetary transaction that happens increasingly often online, they must become all-encompassing experiences that push customers to be part of the brand.
Retail Real Estate: Another major selling point is that New York offers access to various industries Amazon is entering, including advertising, media, fashion, food and finance, Alicia Glen, the city’s Deputy Mayor for Housing and Economic Development, said in an interview. "For a company like Amazon that wants to be in all of these different sectors, they have to be thinking this is a great place to put roots down for the next half century," she said.
...Well, in most cases. Over the next few weeks, 2PM will be highlighting exemplary eCommerce operations run by digital publishers. There aren't very many and, frankly, it's because it's very difficult to introduce core competencies into existing business models. And eCommerce must be a core competency to survive as a vertical.
For media groups who move into eCommerce, there are several areas that must become core competencies: product sourcing, vendor relationship growth, shipping logistics (or 3PL management), customer service control, product copy editing, product photography, CRO (conversion rate optimization), and native brand growth. And depending on resources, front and back end development.
It's a tall order but media-first companies like: BuzzFeed, Barstool Sports (Ugh. I know.), Gear Patrol (my former employer), and even the New York Times are doing great things. I monitor three factors: frequency of product updates, ease of purchase, and ease of delivery.
These are rare exceptions, so alternatives will be discussed as well. Online publishers and podcast groups have enormous potential to move the retail needle. Look no further than Crooked Media's collaboration with Cotton Bureau; together they moved nearly 40,000 units in Q1-Q2 of 2017. For media groups that are reliant upon (often net 90-120) advertising revenue, this can be incredibly beneficial for a media group's cash flow optimization.
There isn't a one-size-fits-all recommendation for every media group but one thing is for certain, adopting an eCommerce plan is a must. Whether or not the CEO should decide to insource or outsource eCommerce operations is the next determination to be made. And as an operator who's operated on both sides, the solution is apparent to me. Most media groups should focus on net profits and leave the grueling operations requirements to existing eCommerce partners.